Pancake House buys Yellow Cab for P800 million

Pancake House Inc. (PHI) approved Wednesday the memorandum of agreement covering its purchase, for P800 million, of all the 500,000 issued and outstanding shares of Yellow Cab Food Corporation, according to its disclosure to the Philippine Stock Exchange. The deal expands the reach of Pancake House network with the addition of Yellow Cab’s 82 outlets, including 13 franchise branches. [See related story here.] Pancake House’s board of directors also approved a note facility agreement with the Metropolitan Bank and Trust Company and First Metro Investment Corporation for the provision of credit facilities “on a clean basis" to cover the P800 million needed to close the purchase in 30 days. Cecile Macaalay, PHI director for corporate planning and finance of Pancake House, said Yellow Cab has a “strategic fit into the basket of brands and products that the Pancake House Group has in its portfolio." In that basket are Teriyaki Boy, 88 Just Asian, Le Coeur de France, The Chicken Rice Shop, and the Phi Culinary Arts and Food Services Institute, Inc. Macaalay added that the new acquisition will boost PHI system sales to over the P4 billion mark. Yellow Cab, according to its 2010 audited financial statements, had net sales of P1.32 billion, operating income of P296 million and net income of P31.62 million. Pancake House, based on its latest financials, had first half 2011 sales of P900.18 million, nearly 74 percent of which were restaurant sales. — KBK, GMA News