Megawide Construction Corp. said it is acquiring PH1 World Developers Inc. from Citicore Holdings Investments Inc. for P5.2 billion.
The company said it has acquired all of PH1 from Citicore Holdings Investments Inc., an affiliate of Megawide.
The deal will be up for approval during the company’s annual stockholders’ meeting later this month.
“The purchase price was arrived at after a careful deliberation by the company and valuation study of PH1 World Developers Inc. in accordance with the 2022 International Valuation Standards. Based on the fairness opinion report issued by FTI Consulting Philippines Inc. on the transaction, the purchase price is fair from a financial point of view,” Megawide said.
PH1’s income last year grew by more than eight times to P66.77 million from the previous year’s P7.9 billion.
Revenues, which mostly come from real estate sales, were at P599.77 million, up by almost double from the previous year’s P311.42 million.
The company is involved in selling residential condominium units under its The Hive project located at San Isidro Street, Ortigas Avenue Extension in Taytay, Rizal which consists of Towers A, B, C and D. Construction of Towers A, B and C are completed as of December 31, 2022, while the construction of Tower D is 98 percent completed as of end 2022.
The company also has an ongoing project named My Enzo Lofts located at Timog Ave. in Quezon City, Metro Manila.
“The acquisition of PH1 is part of Megawide’s business strategy for forward integration. The acquisition is expected to result in the reduction of Megawide’s production costs and improve the Megawide group’s efficiency. Megawide acknowledges that real estate development is a natural progression for construction companies. Such forward integration to real estate is expected to create more value within the Megawide group.”
At a parent level, the acquisition will be considered as an investment in a subsidiary while at a consolidated level, it will be a line-by-line take up.
“Property development is a natural progression for construction companies and the partnership between PH1 and Megawide—beyond a client-contractor relationship—we believe will create better value to both companies and accelerate the enhanced living experience for more Filipino households,” Megawide said.
“The deal will be conducted through the sale of shares of Citicore Holdings Investment Inc. in PH1 to Megawide, and is expected to be concluded via a cash transaction.”