Tech gadgets group files P5.4B IPO
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MANILA, Philippines—Computer hardware and software retailer Upson International Corp. is raising about P5.43 billion via an initial public offering (IPO) next month after sales of tech gadgets swelled during the COVID-19 pandemic.
Upson, founded nearly two decades ago by businessmen and company directors Ricardo Lee and William Lim, runs the country’s biggest chain of mall-based consumer electronics outlets.
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It operates a nationwide store network that sells products from more than 100 suppliers and brands.
Upson is raising funds to open 250 new outlets by 2026—more than doubling its presence to 433 stores nationwide. At the same time, the company plans to expand its total retail space to about 50,000 square meters (sqm) from 22,000 sqm at the end of 2021.
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“There are rapid technological developments in computers and other IT products matched with growing market segments like educational needs and computer and IT-related jobs in all 17 regions,” said Arlene T. Sy, Upson CEO and president, in a statement on Monday.
“These are compelling opportunities that fuel the need for an aggressive expansion of our retail network nationwide,” she added.
The company also owns six warehouses to support operations. These were located in Manila (3), Cebu (1), Cagayan de Oro (1) and Davao City (1). It plans to add nine more warehouses in Metro Manila, Naga, Cabanatuan, and Dagupan.
Upson is offering as much as 986.84 million shares at an indicative maximum offer price of P5.50 per share, according to its IPO prospectus, dated May 11, 2022.
First Metro Investment Corp. was hired as sole issue manager, book runner and lead underwriter for the IPO.
Based on the prospectus, the IPO price would be finalized on June 27 while the offer period would run from July 1-7 this year. The company is targeting to make its Philippine Stock Exchange trading debut on July 15.
Despite the pandemic lockdowns, Upson grew annual revenues by 5 percent to P8.57 billion last year while profits jumped 95 percent to P403.6 million. Compared to the pre-pandemic period in 2019, sales last year were up 13.2 percent while net income surged over 370 percent.
Bulk of the offer, or 789.47 million shares valued at P4.3 billion, would be used to fund Upson’s expansion, the prospectus showed.
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Upson chair Lawrence Lee is selling another 98.68 million shares under a secondary offer to raise P543 million. Lee would raise another P543 million if an over-allotment option for another 98.68 million was fully exercised for post-IPO price stabilization activities.
Upson, which is offering up to 30 percent of its shares to the public, would have a market value of P18.1 billion, based on the indicative offer price.
While considered the top mall-based electronics retailer, Upson cornered just 5.2 percent of domestic industry-wide sales of P157.3 billion in 2020, according to data from University of Asia and the Pacific-Center of Research and Communication Foundation Inc. Roughly 90 percent of sales still came from direct, online and institutional accounts, according to the study.
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