DoubleDragon to acquire 35% of MerryMart

LISTED DoubleDragon Corp. (DD) will acquire a 35% stake in listed consumer and wholesale retailer MerryMart Consumer Corp. under a P1.28-billion deal.

DD will buy 2.66-billion MerryMart common shares at 48 centavos per share from Injap Investments, Inc., it said in a regulatory filing on Wednesday.

The price was based on the 30-day volume-weighted average price (VWAP) of MerryMart shares. Half of the transaction will be paid using DD shares, while the remaining half will be settled in cash worth P637.97 million.

MerryMart is chaired by Edgar “Injap” J. Sia II while DD is a joint venture between Mr. Sia and Jollibee Group Founder and Chairman Tony Tan Caktiong.

The deal also requires DD to conduct a mandatory tender offer of MerryMart shares held by remaining shareholders of the total issued and outstanding capital stock at the same valuation, subject to final regulatory approvals.

“This transaction translates a total equity valuation for MerryMart of approximately P3.65 billion, based on the 30-day VWAP pricing,” DD said.

DD said the acquisition of a stake in MerryMart is in line with the company’s plan to shift into an investment holding company.

“Given MerryMart Group’s various formats in retail and wholesale as well as its pharmacy subsidiaries who are major pharmacy players in Quezon-Luzon and Zamboanga-Mindanao, and its dominant grocery business in Capiz province, the acquisition of the MerryMart Group is expected to create long-term value and synergy to DD,” DD said.

In April 2021, DD amended its articles of incorporation that changed its primary purpose to be an investment holding company from a real estate developer.

MerryMart generates over P7 billion worth of recurring revenue annually from essential retail such as grocery and pharmacy, and other consumer related businesses. It has 135 branches nationwide.

DD said the acquisition would also support its target of reaching P500 billion in revenue by 2035.

On Wednesday, DD shares rose by 17.20% or P1.45 to P9.88 each while MerryMart stocks surged by 25% or 12 centavos to 60 centavos apiece. — Revin Mikhael D. Ochave