Upson International Corp., a retailer of personal computers and information technology products, said the Securities and Exchange Commission (SEC) approved its initial public offering (IPO).
On Jan. 12, the SEC cleared the company’s plan to sell up to 789.47 million primary common shares and up to 98.68 million secondary common shares, with an over-allotment option of up to 98.68 million common shares at a higher price at 5.50 p.
Based on the offering price, Upson anticipates gross proceeds of approximately P4.34 billion from the primary offering. Assuming the over-allotment option is exercised in full, up to 5.43 billion pesos can be raised.
Proceeds from the IPO will be used to expand the store network and for other general corporate purposes.
Upson has shelved its plans for an IPO, which was reportedly scheduled for October last year, and pushed it back to the first quarter of 2023.
The company plans to open 250 stores or an additional 25,000 square meters of retail space over the next 5 years, from 2023 to 2027, targeting an aggressive rollout over the next 3 years or by 2025.
The rollout plan includes new stores in Metro Manila as well as strategic areas in Luzon, Visayas and Mindanao.
To complement its store expansion, Upson will build nine new warehouses and renovate its six existing warehouses. The new warehouses, along with more delivery vehicles and favorable supplier agreements, will enable Upson to maintain adequate stock at consistent prices in all of its stores across the country.
“During the two-year pandemic period of 2020-2021, losing significant walk-in customers has been a real challenge for retailers like us,” said Arlene Sy, President and CEO of Upson.
“Long-term physical immobility due to lockdowns and precautionary measures has resulted in our market adapting through online education and work-from-home regulations. These adjustments have been favorable to us and resulted in our revenue growth of 7.7 percent and 5.1 percent in 2020 and 2021, respectively.”
As of September 30, Upson’s 200 retail network included its own retail brands under Octagon Computer Superstore, Micro Valley, Gadget King and Octagon Mobile, as well as other concept stores and specialty stores such as Acer, HP, Brother and Silvertec in Selected locations.
Upson’s net income increased 68 percent to P400.23 million for January-September 2022 from P237.38 million last year. Revenue for the period reached P7.03 billion, up 10 percent from last year’s net revenue of P6.38 billion.
“The slow return of foot traffic through Q2 and Q3 2022 brings encouraging opportunities that further support our growth plans. Our revenue growth of 10 percent in the third quarter of 2022 compared to the same period in 2021 is close to our pre-pandemic performance, which was accompanied by healthier walking,” said Sy.
“Our management recognizes that there are many underserved markets across the country. We remain committed to making our PCs and IT products accessible to every Filipino to the farthest borders of this country. This is intended to be our legacy contribution as the Philippines steadily advances towards digitization.”