D&L IPO 2 times oversubscribed

MANILA, Philippines - D&L Industries Inc.’s initial public offering (IPO) has been two times oversubscribed amid strong demand from both retail and institutional investors, according to its lead domestic and international underwriter.

Maybank ATR Kim Eng Capital said the book was two times covered with demand for the institutional book equally split between domestic and international investors.

“The roadshow for institutional investors took the management from Manila to Hong Kong, Singapore and Kuala Lumpur. The onshore and regional demand that resulted from the roadshow was strong,” Maybank ATR Kim Eng Capital said.

D&L, the country’s leading manufacturer of customized food ingredients and specialty plastic colorants and additives, sold  1.07 billion common shares in both local and international markets at P4.30 each share or a total of  P4.6 billion.  The offer shares represent 30 percent of the firm’s post-IPO outstanding capital.

Its majority shareholder Jadel Holdings Co. has an option to sell up to 15 percent or 160.71 million shares to foreign investors in case of robust demand which is seen to generate an additional P691 million.

Proceeds from the offering will be used for investments and acquisitions, for the payment of financial obligations, and for general corporate purposes.

D&L is considered an indirect consumer play since it manufactures products for use by food, electronics, fuel and health and beauty companies.

The company  derives 80 percent of its revenues from the supply of food ingredients to the country’s top restaurant chains and branded food products.  It  dominates every industry that it is engaged in, with a market share of at least 50 percent in the fats and oil (50 percent market share), aerosol (54 percent), colorants and additives (54 percent), and oleochemicals (54 percent) businesses.

DA Market Securities said D&L is “well-positioned to capture the opportunities from industry trends due to its leading position in its respective businesses amid optimistic outlook for domestic consumer spending, coupled with extraordinary surge during election year 2013; as well as increasing demand for environmentally friendly products.”