ABOITIZ Equity Ventures Inc. (AEV), the listed holding firm of the Aboitiz family, has acquired a 51 percent stake in local remittance firm PETNET for P1 billion in a bid to enter the robust remittances segment.
In a disclosure to the stock exchange, AEV said it completed the acquisition of 2.461 million shares of PETNET on Monday priced at P407.78 per share, accounting for a 51-percent controlling interest in the remittance firm.
Out of the 2.461 million shares acquired, some 1.235 million shares equivalent to 25.6 percent interest were acquired from existing PETNET shareholders, while the remaining 1.226 million shares or 25.4 percent will be subscribed from the unissued capital stock of PETNET, the company said.
PETNET is the largest Western Union agent network in the Philippines, having around 2,500 branches across the country.
“We are excited about this acquisition for several reasons. PETNET has a large growth and development potential, with the continued increase in remittances from OFWs (overseas Filipino workers) and with a large opportunity to distribute complementary products through an extensive network of outlets. AEV, as new majority owner, can add significant value and boost this development even further,” Erramon I. Aboitiz, AEV president and chief executive officer, said in a separate statement.
The company said it will capitalize on the remittances segment to benefit the shareholders of both AEV and PETNET by increasing the scale of PETNET operations to corner a larger chunk of the market in this segment.
OFW remittances contributed 8 percent to the country’s gross domestic product last year and have grown by around 7 percent yearly.
“The market for money transfers is a very fragmented market and we see that AEV can add value in PETNET’s strategy to grow and potentially consolidate the market organically. We are also open to potential add-on acquisitions, should it fit strategically,” Aboitiz said.
With the firm’s 51 percent interest, PETNET will continue as a stand-alone business within the Aboitiz Group with the same management team, while all the existing shareholders will retain their 49 percent stake in PETNET.
“It is our intention to act as a very active owner from a board level perspective, but PETNET will continue to be a self-driven unit,” Aboitiz said.
For his part, PETNET CEO Larry Ocampo said: “We are excited to have Aboitiz as a strong and supportive new majority owner. PETNET has reached a growth stage where it needs to take some big steps both internally and externally, and we think that AEV is the right active owner to support this development. Personally, I look forward to the opportunity to take the company through this next growth journey in partnership with AEV.”
PETNET is the latest addition to the Aboitizes’ portfolio of businesses. Aboitiz has a presence in the power segment via Aboitiz Power Corp, property via Aboitiz Land Inc., food via Pilmico Foods Corp., and banking via Union Bank of the Philippines.
Other than the remittances segment, AEV is also looking to expand its power business to have an additional capacity of 2,000 megawatts (MW) in the next five years. It is also into infrastructure and transport projects through the government’s public-private partnership (PPP) scheme.
AEV has joined the bidding for the P123-billion Laguna Lakeshore Expressway Dike project under Team Trident, or Trident Infrastructure and Development Corp., a consortium of four partners involving AEV, Ayala Land Inc., SM Prime Holdings Inc., and Megaworld Corp.
It is also planning to bid for the Light Rail Transit 2 operation and maintenance project.
The firm is also considering other PPP projects, particularly bundled airport projects such as the P20.26-billion Bacolod-Silay Airport and the P30.40-billion Iloilo Airport, as well as the P2.34 -billion New Bohol Panglao Airport, P14.62-billion Laguindingan Airport and the P40.57-billion Davao Airport.