Emerging markets private equity firm Aureos Capital is in talks to sell its 21 percent stake in listed restaurant operator Pancake House Inc., its Philippine-based representative said on Friday.
Danny Lizares, a partner with Aureos Capital, said the company is ready to exit its more than six-year investment in Pancake House. He said discussions are now ongoing with “selected” investment banks on the best way to arrange the stake sale.
“Based on our initial talks with some of these banks and advisors, there are, according to them, interested parties for Pancake House,” Lizares said in a phone interview. He declined to discuss financial details of the potential sale.
Pancake House shares did not move at P10 each on Friday, valuing the company at P2.38 billion while valuing Aureos Capital’s stake at close to P500 million.
Aureos Capital first entered Pancake House in October 2005 with an initial $4 million investment to help finance the acquisition of Japanese-themed chain Teriyaki Boy.
Pancake House continued growing via acquisitions when it added French-style café chain Le Coeur de France in 2008 and the Yellow Cab pizza chain in August last year.
It attempted but failed to buy grilled chicken chain Mang Inasal in 2010, which was instead acquired by Jollibee Foods Corp.
Pancake House is controlled by the group of its Chairman and Chief Executive Officer Martin Lorenzo.
Lizares said Pancake House is “doing exceptionally well” in terms of sales and earnings before interest, taxes, depreciation and amortization, or Ebitda.
“A lot of that growth is attributable to acquisitions,” Lizares said.
Together with other brands like Sizzlin’ Pepper Steak and Dencios, Pancake House said consolidated revenues in the nine months to September rose almost 9 percent to P1.48 billion year-on-year as profits rose 27 percent to P37.97 million.
Sales next year could hit P3.7 billion with the full-year contribution of Yellow Cab, Pancake House said earlier.
The Pancake House group, including joint venture and franchised stores, operated 259 restaurants in the country as of September last year.