Food and beverage kiosks operator Fruitas Holdings Inc. on Thursday said it is acquiring certain assets of Balai Pandesal Corp. in its bid to accelerate its foray into the bakery sector.
Currently, Fruitas owns 5 franchised branches of Balai Pandesal which are all in Metro Manila, but it decided to buy the entire trademark, recipes and other technical know-how, certain equipment and inventory of the bread company.
The company did not disclose the terms of the deal, but the acquisition is expected to be completed no later than the end of June.
The deal will be paid through cash and is below 10 percent of the total assets and book value of the company as of end-2020. An earnest money will be released upon signing of memorandum of understanding while payment terms for the balance are to be agreed in the definitive transaction documents, the company said.
“We have proven our ability to successfully integrate relatively small acquisitions and build them into significant revenue and profit contributors like Jamaican Pattie, Sabroso Lechon and Soy and Bean. We are excited about the prospects for ‘Balai’ as pan de sal is another Filipino daily diet staple that we want to supply and increase our market penetration,” Lester Yu, Fruitas president and CEO, said.
“This will help us continue to pivot our business and increase our store network presence in local communities. The performance of our community stores has exhibited more resilience and growth beyond our initial expectations.”
Balai Pandesal opened its first store in 2012 and has built a strong following among Metro Manila residents for its own unique traditional pan de sal recipe. It sells a wide range of bread products in all of its stores, and also offers cake, bread spreads, taho and ice cream in selected stores.
“Post-acquisition, Balai Pandesal will be more capable to aggressively challenge the high-quality pan de sal and specialty breads market. Further, Fruitas’ existing product lines will fit smoothly and effectively into Balai Pandesal stores,” the company said.
Fruitas said it has already identified several strategic locations and is set to expand the Balai Pandesal store network to at least 20 within 2021. VG Cabuag
Its near-term goal is to open up to 100 Balai Pandesal stores, placed in high-density residential communities.
Fruitas intends to sell a variety of its other food and beverage products in Balai Pandesal stores as more locations are opened.
This will complement Fruitas’ earlier announced initiative to increase its network of community stores carrying the Babot’s Farm and Soy & Bean brands to 100 by the end of this year.