FRUITAS Holdings, Inc. has acquired full ownership of cloud kitchen business Fly Kitchen Inc. in its efforts to increase market share, the company said on Thursday.
“The purchase of Fly Kitchen fits our strategic objective to remain competitive in the digital arena. The startup complements our present activities and will enable us to accelerate the growth of this new source of revenue and profit,” said Fruitas President and Chief Executive Officer Lester C. Yu in a statement.
In a separate disclosure, the company said that under the agreement, it will acquire all 2,000 outstanding shares of Fly Kitchen, which will become one of its subsidiaries.
The transaction was closed on June 1 and comes after Fruitas launched its cloud-based kitchen business Nube Kuxina in the third quarter of 2022.
“Among Fly Kitchen’s key assets are the leasehold interests in its four kitchens, all of its inventory and equipment, recipes, and other technical know-how,” the company said.
It added that the payment would be below 10% of the total assets and book value of Fruitas as of March 31, 2023. It has yet to disclose the price per share of the acquisition.
The company said the acquisition will enable it to significantly expand its cloud kitchen business and “efficiently serve its customers,” as it aims to introduce its food and beverage products such as Fruitas fresh juices, Ling Nam, Soy & Bean, and Sabroso Lechon.
Founded in 2020, Fly Kitchen, was able to expand into four strategic kitchen locations: Makati City, Pasig City, Mandaluyong City, and Quezon City. It has a combined cooking area of 200 square meters and caters to more than 10 brands. It has also developed strong connections with third-party food aggregators like Foodpanda and Grabfood.
“We are optimistic about the future of Fly Kitchen because many Filipinos have changed their eating habits. This will enable us to continue to reorient our company and strengthen our visibility online,” Mr. Yu added.
During the first quarter of this year, the listed food and beverage retail operator tripled its net income to P19.2 million from P6.4 million in the same period last year.
On Thursday, Fruitas shares fell by 2.44% or P0.03 to P1.20 apiece. — Adrian H. Halili