Upson International Corp., a retailer of personal computers and information technology products, said the Securities and Exchange Commission (SEC) has approved its initial public offering (IPO).
On January 12, the SEC gave its go-ahead to the company’s plan to sell up to 789.47 million primary common shares and up to 98.68 million secondary common shares, with an over-allotment option of up to 98.68 million common shares, priced at up to P5.50 each.
Based on the offer price, Upson expects to raise gross proceeds of approximately P4.34 billion from the primary offer. It can raise up to P5.43 billion, assuming the overallotment option is fully exercised.
Proceeds of its IPO will be used to expand its store network and for other general corporate purposes.
Upson has earlier shelved its plans for an IPO, supposedly scheduled in October last year, and has rescheduled it to the first quarter of 2023.
The company targets to open 250 stores or an additional retail space of 25,000 square meters for the next 5 years, from 2023 to 2027, with aggressive rollout targeted for the next 3 years, or until 2025.
The rollout plan covers new stores in Metro Manila as well as strategic areas in Luzon, Visayas and Mindanao.
As a complement to its store expansion, Upson will develop 9 new warehouses and renovate its six existing warehouses. The new warehouses, coupled with increased delivery vehicles and favorable supplier arrangements, will enable Upson to maintain adequate stocks of inventory at uniform prices in all its stores nationwide.
“During the two-year pandemic period of 2020 to 2021, the loss of significant foot traffic was a real challenge for retailers like us,” Upson President and CEO Arlene Sy said.
“The long-term physical immobility due to lockdowns and precautionary measures resulted in our market’s adaptation via online education as well as work-from-home arrangements. Said adaptations were favorable to us and resulted in our revenue growths of 7.7 percent and 5.1 percent in 2020 and 2021 respectively.”
As of September 30, Upson’s 200 retail network included its own retail brand outlets under Octagon Computer Superstore, Micro Valley, Gadget King and Octagon Mobile, as well as other concept stores and specialty stores, such as Acer, HP, Brother and Silvertec in selected locations.
Upson’s net income rose by 68 percent to P400.23 million in January to September 2022 from the previous year’s P237.38 million. Sales for the period reached P7.03 billion, 10 percent higher than the previous year’s P6.38 billion net sales.
“The slow return of foot traffic by the second and third quarters of 2022 brings encouraging opportunities that support our growth plans even more. Our 10 percent revenue growth in the third quarter of 2022 compared to the same period in 2021 is close to our pre-pandemic performance that came with healthier foot traffic,” Sy said.
“Our management recognizes that there are many underserved markets nationwide. We remain committed to make our PCs and IT products within reach of every Filipino up to the farthest borders of this country. This shall be our legacy contribution as the Philippines progresses steadily towards digitalization.”