AEV revealed the move in a disclosure to the Philippine Stock Exchange earlier this month.
The company reported that it acquired the controlling stake in Europe Nutrition Joint Stock Company (Eurofeed), which is located in Binh Duong, South Vietnam, for USD$3.7m, putting Eurofeed’s overall value at USD$5.3m.
The acquisition was based on enterprise value less debt, noted AEV.
AEV said the deal gave it “a strategic entry point to the animal feed milling industry in Vietnam.”
In 2014, Pilmico International also acquired a 70% equity interest in Vietnam’s fourth largest aquaculture feed company, Vinh Hoan 1 Feed JSC (VHF) from Vinh Hoan Corp, with the option to purchase the remaining 30% stake over the subsequent five years.
Further M&A activity planned
According to AEV's annual report 2016, Pilmico is among the top three flour milling companies in the Philippines and is a strong player in the animal feeds and swine production sectors. It is currently building capacities and capabilities to sustain profitability and grow its businesses both in the Philippines and in the ASEAN region.
In 2016, Pilmico recorded a 4% YoY increase in revenues at PHP23.7bn, revealed the AEV annual report 2016. That increase was said to be largely driven by the strong volume growth of its Philippines feed and farms businesses, which offset the performance of both its feeds operations in Vietnam and of its overall flour business.
In a report published this month detailing its second quarter financial results for 2017, AEV said Pilmico had allocated PHP1.7 bn capex for the year in support of various initiatives for its flour, feeds, and farms divisions, as well as pursuing opportunities in the region, with further merger and acquisition activity on the cards.
It intends to further grow and strengthen its feeds business in the Philippines.
“Pilmico will be expanding its feed mill capacity in Iligan and Tarlac."
Its feed division will expand through increasing both its foothold in the Philippines and through export to neighboring markets.
Pilmico also reported it also wants to increase aqua feed exports to ASEAN and African markets from Vinh Hoan Feeds, its aqua feed operations in Vietnam.