SECURITIES AND EXCHANGE COMMISSIONSEC FORM 17-C
CURRENT REPORT UNDER SECTION 17
OF THE SECURITIES REGULATION CODE
AND SRC RULE 17.2(c) THEREUNDER
1. Date of Report (Date of earliest event reported) Mar 9, 20222. SEC Identification Number CS2009301253. BIR Tax Identification No. 281-768-124-0004. Exact name of issuer as specified in its charter MerryMart Consumer Corp.5. Province, country or other jurisdiction of incorporation Republic of the Philippines6. Industry Classification Code(SEC Use Only) 7. Address of principal office 9th Floor Tower 1 DoubleDragon Plaza, DD Meridian Park, Macapagal Ave. cor. Edsa Extension, Bay Area, Pasay City, PhilippinesPostal Code13028. Issuer's telephone number, including area code +632874311119. Former name or former address, if changed since last report N/A10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class
Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
Common
7,594,936,709
11. Indicate the item numbers reported herein Item 9
The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.
MerryMart Consumer Corp.MM
PSE Disclosure Form 5-1 - Substantial Acquisitions References: SRC Rule 17 (SEC Form 17-C) and
Section 4.4 and/or Section 5 of the Revised Disclosure Rules
Subject of the Disclosure
MERRYMART Consumer Corp. ("MERRYMART") on March 9, 2022 has signed an Agreement with ZC Ramthel Corporation ("Cecile's Pharmacy") finalizing its acquisition of a majority stake in the Mindanao based pharmacy chain.
Background/Description of the Disclosure
Cecile's Pharmacy is the biggest pharmacy chain in the city of Zamboanga in Mindanao Region, and the brand has been in operation for 57 years since 1964.
MerryMart has executed an Agreement finalizing the acquisition of a post-investment stake of 53.125% of Cecile's Pharmacy chain.
Cecile's Pharmacy chain has 21 strategically located operating branches to date, with over 300 workforce, and is EBITDA and Net Income positive.
The current Management team of Cecile's Pharmacy chain will continue to run the operations of the company in tandem with the MerryMart team.
"In addition to enhancing MERRYMART's trade volume in the pharmacy and prescription drug items, this transaction will bring significant improvement on cost efficiencies as MERRYMART continues to strive to deliver better value to its customers and stakeholders," said MERRYMART CFO Hannah Yulo-Luccini.
"There are only very few drug store chains in the Philippines that has been operational for decades and still remain to be the market leader and the top-of-mind brand in their respective market region. Cecile's Pharmacy chain is one of that select group that stood the test of time and we believe this acquisition will add great value to the MERRYMART Group's ecosystem," said MERRYMART Chairman Edgar "Injap" Sia II.
"While the MERRYMART Group continues on with its organic expansion, MERRYMART will continue to keep its eyes open for M&A opportunities in both the grocery and pharmacy space that would accelerate its growth to capitalize on the continued consolidation from traditional to modern retail in the Philippines," added Mr. Sia.
MERRYMART Group's various formats are MerryMart Store, MerryMart Market, MerryMart Grocery, MerryMart Wholesale and Dark Groceries. MERRYMART has recently formed a new subsidiary MM Consumer Technologies Corp with MBOX Smart Lockers as the first in its consumer technology portfolio that is expected to add and complement to the ecosystem of the MERRYMART Group.
MERRYMART has set its Vision 2030 with the goal of a total of 1,200 branches nationwide aims to generate Php 120 Billion in systemwide recurring consumer sales revenue.
Date of Approval by Board of Directors
Mar 8, 2022
Date of Approval by Stockholders
N/A
Other Relevant Regulatory Agency, if applicable
N/A
Date of Approval by Relevant Regulatory Agency
N/A
Rationale for the transaction including the benefits which are expected to be accrued to the Issuer as a result of the transaction
Cecile's Pharmacy chain has 21 strategically located operating branches to date, with over 300 workforce, and is EBITDA and Net Income positive.
In addition to enhancing MERRYMART's trade volume in the pharmacy and prescription drug items, this transaction will bring significant improvement on cost efficiencies as MERRYMART continues to strive to deliver better value to its customers and stakeholders. It will also give MERRYMART greater market share in and region and increase its competitiveness while strengthening its supply chain.
Description of the transaction including the timetable for implementation and related regulatory requirements, if any
Selling Shareholders have sold twenty-five thousand (25,000) common shares representing 25.00% in Cecile's Pharmacy (the "Secondary Shares"). Ninety percent (90%) of the Purchase Price was paid simultaneous to the signing of the Agreement while Ten Percent (10%) of the Purchase Price shall be held as retention to be released over three years.
In addition to acquiring the Secondary Shares, the Parties have also agreed for MERRYMART to infuse an additional Pesos: Two Hundred Eighty-One Million Seven Hundred Seventy-Five Thousand, Philippine currency (Php281,775,000.00), more or less, in exchange for sixty thousand (60,000) common shares (the "Primary Shares") to be issued by Cecile's Pharmacy to bring its total ownership to 53.125%.
After the transfer of the Secondary Shares, Cecile's Pharmacy will be owned 75.00% by the Saavedra family 25.00% by MERRYMART. Then after the issuance of the Primary Shares, Cecile's Pharmacy will be owned 46.875% by the Saavedra Family and 53.125% by MERRYMART. MERRYMART has the right but not the obligation to increase its total ownership stake in Cecile's Pharmacy to at least 67% after fifty-eight (58) months.
In case either Party decides to sell any of its shares in Cecile's Pharmacy, they have to first offer these shares to the other Party, in addition to the Parties Right of First Refusal on any third party offer for any of the shares in Cecile's Pharmacy. The Parties have agreed to Drag Along and Tag-Along Rights covering any sale of shares in Cecile's Pharmacy.
After the signing of the definitive agreement today March 9, 2022, the Saavedra family has acceded to cede Board control over Cecile's Pharmacy to MERRYMART. This was effected through irrevocable proxies over the secondary shares acquired and the election of five nominees of MERRYMART to the 8-seat Board of Directors of Cecile's Pharmacy.
Identities of the parties to the transaction
Name
Nature of Business
Nature of any material relationship with the Issuer, their directors/officers or any of their affiliates
Gil G. Saavedra
"Selling Shareholder" of the Saavedra Family of Cecile
None
Ramon G. Saavedra, Jr.
"Selling Shareholder" of the Saavedra Family of Cecile
None
Jose Ray G. Saavedra
"Selling Shareholder" of the Saavedra Family of Cecile
None
Charles Victor S. Argos
"Selling Shareholder" of the Saavedra Family of Cecile
None
Christian S. Argos
"Selling Shareholder" of the Saavedra Family of Cecile
None
Primer Alberto S. Asprer, Jr.
"Selling Shareholder" of the Saavedra Family of Cecile
None
Tris Marty S. Asprer
"Selling Shareholder" of the Saavedra Family of Cecile
None
Deuciele Marie Asprer Bautista
"Selling Shareholder" of the Saavedra Family of Cecile
None
Felix Louell G. Saavedra
"Selling Shareholder" of the Saavedra Family of Cecile
None
Terms and conditions of the transaction
The nature and amount of consideration (e.g. price per share, the aggregate amount)
Aggregate amount of Pesos Three Hundred Ninety-Nine Million One Hundred Eighty-One Thousand Two Hundred Fifty, Philippine currency (Php399,181,250.00) or a price of Pesos Four Thousand Six Hundred Ninety-Six and 25/100, Philippine currency (Php4,696.25) per common share for 53.125% of the Cecile's Pharmacy.
Basis upon which the amount of consideration or value of the transaction was determined
The purchase price was based on the valuation agreed by the Parties equivalent to a market multiple of sales less debt plus cash.
The number of shares to be acquired
25,000 secondary shares; 60,000 primary shares
Ratio/percentage to total outstanding capital stock
53.13
Terms of payment
Ninety percent (90%) of the Purchase Price was paid simultaneous to the signing of the Agreement while Ten Percent (10%) of the Purchase Price shall be held as retention to be released over three years.
Conditions precedent to closing of the transaction, if any
N/A
Description of the company subject of the transaction
Nature and business
Cecile's Pharmacy is the biggest pharmacy chain in the city of Zamboanga in Mindanao Region, and the brand has been in operation for 57 years since 1964.
Discussion of major projects and investments
N/A
List of subsidiaries and affiliates, with percentage holdings
Effect(s)/impact on the business, financial condition and operations of the Issuer
The 21 branches of Cecile's Pharmacy will form part of the branch network of the MERRYMART Group and its revenues and profit will be consolidated by MERRYMART moving forward. The acquisition will also increase the volume and scale of the MERRYMART Group that will further enhance its cost efficiencies.
Other Relevant Information
Amended the disclosure to add information that the Board of Directors reflected in the disclosure template is the Board of Directors post-transaction.
Filed on behalf by:
Name
Jose Roelph Desales
Designation
Assistant Corporate Secretary
Attachments
Original Link
Original Document
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Disclaimer
MerryMart Consumer Corporation published this content on 10 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 March 2022 00:52:01 UTC.
MerryMart Consumer Corp. is a Philippines-based consumer-focused retail company. The Company is engaged in the operation of retail stores in the supermarket and household essentials category. The Company, through its subsidiary, MerryMart Grocery Centers Inc, it offers the franchise business model covering supermarkets and household essentials stores in the Philippines. The Company's store formats include MerryMart Grocery, MerryMart Market, MerryMart Store, MerryMart Wholesale, and MerryMart Consumer Technologies Corp. The MerryMart Grocery is a supermarket that offers a variety of food and non-food products and includes a broad selection of personal care products as well as a pharmaceutical section. The MerryMart Market is a medium format specialized grocery that offers grocery items and a selection of fruits, vegetables and seafood products. The MerryMart Store is a small format household essentials store, which combines a mini-grocery, personal care shop, and pharmacy in one store.
MERRYMART CONSUMER CORP. 