Vitarich to seal Broilers Club acquisition this February

Vitarich Corp. expects to complete the P280-million acquisition of Broilers Club, Inc. (BCI) and its breeder farm facilities in Davao del Sur within the month.

The company said its board approved the terms and conditions of the acquisition after completing a due diligence review.

“The definitive agreement and the implementing contracts and documents of the subject acquisition are expected to be finalized, signed and executed within the month,” Vitarich said in a disclosure on Friday.

Vitarich is a poultry integrator and manufacturer of animal feeds and food products.

Upon closing of the transaction, BCI will become a wholly-owned subsidiary of Vitarich and will supply all of its day-old chicks to the latter.

The deal involves acquiring 125,000 common shares of BCI, advances to BCI’s shareholders and breeder farm facilities in Davao del Sur. These include land, improvements and equipment.

The agreement and implementing document will be signed on Feb. 23.

Vitarich said that the acquisition is expected to boost its total breeder output by 8 percent. It is a crucial part of a strategy to stabilize broiler chicks’ supply and lower production costs.

The payment will be made in tranches: P95 million for purchasing shares of BCI at P760 apiece and P130 million for advances of BCI shareholders.

Another P25 million will be paid for the land registered in the name of two of BCI’s shareholders and part of breeder farm facilities.

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Also, there is a P30-million tranche for the full payment of BCI’s bank loan balance for one of its properties.

“The transactions are subject to customary closing and post-closing conditions, such as execution of the definitive agreement and implementing contracts, full payment of the consideration, payment of taxes, delivery of stock certificates and certificates of title,” the company said.

Incorporated in 2018, BCI is engaged in poultry and egg production, which operates under Southern Sunrise Agriventures.

BCI acquired a parcel of land in Sta. Cruz, Davao del Sur covering 46,360 square meters to provide hatching eggs for poultry aggregators.

Vitarich reported a net income of P120.56 million in the nine months ending September, a 53.5-percent decrease, due to higher operating expenses.