Coca-Cola FEMSA, S.A.B. de C.V. (BMV: KOFL) (NYSE: KOF) ("Coca-Cola
FEMSA" or the "Company"), the largest public bottler of Coca-Cola
products in the world, announces that it has reached an agreement
to acquire 100% of Spaipa S.A. Industria Brasileira de Bebidas
("Spaipa"), the second largest privately owned bottler in the
Brazilian Coca-Cola system, in an all-cash transaction. During the
last twelve months ended June 30, 2013, Spaipa sold 233.3 million
unit cases of beverages, including beer, generating approximately
US$905 million in net revenues.
Spaipa's strategic footprint is a perfect geographic fit which
links Coca-Cola FEMSA's operations in the state of Mato Grosso do
Sul and the state of São Paulo. This transaction will increase our
volume in Brazil by 40%, allowing us to reach 39% of the Coca-Cola
system's volume in the country.
This franchise operates in more than half of the state of São
Paulo and the state of Paraná with 4 bottling facilities and 7
distribution centers and has more than 6,000 employees serving
close to 17 million consumers.
The aggregate enterprise value of this transaction is US$1,855
million. During 2012, Spaipa sold 236.0 million unit cases of
beverages, generating net revenues of approximately US$929 million
and a pro forma consolidated EBITDA of US$152 million.
In recent quarters, changes to certain regulations, including
the transportation law, as well as a generally weak consumer
environment, negatively impacted both Coca-Cola FEMSA's and
Spaipa's operations in Brazil. As a result, Spaipa's estimated pro
forma consolidated EBITDA of the last twelve months ended June 30,
2013 was US$134 million. The short term effects of these changes
have largely been assimilated by Spaipa and our operations, and we
will continue working to enhance the profitability of our combined
operations going forward.
The preliminary estimated amount of synergies to be captured
from this transaction in the next 18 to 24 months is approximately
US$33 million at the EBITDA level. These synergies will result from
the reconfiguration of the logistic network, efficiencies in
general and administrative expenses and the implementation of
Coca-Cola FEMSA's commercial practices. In addition, as is
customary with this type of transaction in Brazil, there are
certain other benefits below the EBITDA line that would have to be
deducted from the above stated enterprise value of this transaction
for comparison purposes.
The agreement has been approved by the Board of Directors of
Coca-Cola FEMSA and is subject to the approval of the Conselho
Administrativo de Defesa Econòmica, the Brazilian antitrust
authority. Coca-Cola FEMSA will also seek the approval of The
Coca-Cola Company for this transaction.
The transaction will be financed with new bank debt for which
Coca-Cola FEMSA has obtained formal commitments. After this
acquisition financing, the pro forma net debt to EBITDA ratio will
be 1.6x, highlighting the solid financial position of the
company.
"Since the acquisition of Panamco ten years ago our team
continues strengthening our leading position in the system in
Brazil, while consistently increasing the profitability of this
territory. Despite the challenges that exist in the short-term
market conditions, our long-term view is consistent with the
momentum that we have built over a decade of operating in this
country. We continue to be committed to creating long-term
economic, social and environmental value for all of our
stakeholders," said José Antonio Fernández Carbajal, Chairman of
the Board of Directors of Coca-Cola FEMSA.
"We continue to create a robust platform in Brazil with the
acquisition of the second largest privately owned bottler in the
system, operating in one of the regions with the highest GDP per
capita in the country. We are privileged to serve as many consumers
in Brazil as we do in Mexico, and our company will benefit from the
talented and experienced employees of the Spaipa franchise.
Building on our operating capabilities and solid financial
position, we are confident that our company will be able to
deleverage our balance sheet in a short period of time," said
Carlos Salazar Lomelín, Chief Executive Officer of the Company.
CONFERENCE CALL INFORMATION
We invite you to participate in the conference call to announce
the transaction, which will be held on Tuesday, September 3, 2013,
at 13:00 P.M. Eastern Time (12:00 P.M. Mexico City Time).
The speakers on this call will be Mr. Carlos Salazar, Chief
Executive Officer of Coca-Cola FEMSA and Mr. Hector Treviño, Chief
Financial Officer of Coca-Cola FEMSA.
To participate in the conference call, please dial: Domestic
U.S.: 888-510-1765 or International: 719-325-2484; Participant
passcode: 9791188. If you wish to access this conference call using
a specific toll free number for your country, please visit the
Company's website for additional information. We invite investors
to listen to the live audio cast of the conference call on the
Company's website, www.coca-colafemsa.com.
If you are unable to participate live, the conference call audio
will be available at www.coca-colafemsa.com.
Coca-Cola FEMSA, S.A.B. de C.V. produces and distributes
Coca-Cola, Fanta, Sprite, Del Valle, and other trademark beverages
of The Coca-Cola Company in Mexico (a substantial part of central
Mexico, including Mexico City, as well as southeast and northeast
Mexico), Guatemala (Guatemala City and surrounding areas),
Nicaragua (nationwide), Costa Rica (nationwide), Panama
(nationwide), Colombia (most of the country), Venezuela
(nationwide), Brazil (greater São Paulo, Campiñas, Santos, the
state of Mato Grosso do Sul, part of the state of Goias, part of
the state of Rio de Janeiro and part of the state of Minas Gerais),
Argentina (federal capital of Buenos Aires and surrounding areas)
and Philippines (nationwide), along with bottled water, juices,
teas, isotonics, beer, and other beverages in some of these
territories. The Company has 63 bottling facilities and serves more
than 321 million consumers through 2,700,000 retailers with more
than 100,000 employees worldwide.
Spaipa produces and distributes Coca-Cola, Fanta, Kuat, Del
Valle, and other trademark beverages of The Coca-Cola Company
serving 735 cities in parts of the state of São Paulo and the state
of Parana. Spaipa was founded through the merger of three bottlers,
which origins as a Coca-Cola franchise date back to 1946 and
currently operates 4 bottling facility and 7 distribution centers
with more than 6,000 employees serving 16.8 million consumers.
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For Further Information: Investor Relations Jose Castro
Email Contact (5255) 1519-5120 / 5121 Roland Karig Email Contact
(5255) 1519-5186 Miguel Murcio Email Contact (5255) 1519-5148
Website: www.coca-colafemsa.com
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