GT Capital looking for strategic global partner as it considers expanding into new sectors
GT Capital Holdings, Inc. is on the prowl for acquisitions that will create synergies with its existing businesses and a strategic global partner that will set the stage for its entry into a new sector.
In an investors’ briefing on Tuesday, GT Capital President Maria Carmelo Luza Bautista said the holding firm of tycoon George S.K. Ty is in the “early stages” of looking at opportunities in other sectors.
“If we do make a major investment in a new sector, part of the business model requires a strategic global partner,” Mr. Bautista said.
GT Capital has tapped the expertise of dominant global players to support its foray into new businesses such as French insurer AXA and Japanese firms Toyota and Isetan Mitsukoshi.
“That’s the greatest risk for most conglomerates. The danger is they expand beyond their core competencies and for us there is no risk of growing out of our core competence because we normally go out of the new sector if and only if we have a strategic global partner who is dominant in that space and is really is a major player,” Mr. Bautista said.
Any acquisition will be “opportunistic” and should extend the value chain of its existing businesses to fit the investment criteria.
“Right now, the value chain for example is for every vehicle sold, if it is a Toyota, we have a wholesale margin, we have a retail margin on dealership, we have financing and insurance for every car,” Mr. Bautista said.
“The idea is to extend that value chain so if ever there will be strategic acquisition it is to further expand that value chain perhaps how those cars are brought in, how they are serviced,” he said.
GT Capital reported a 29% rise in core net income to P15 billion last year from P11.7 billion in 2016 on the back of a 19% increase in revenues to P239.8 billion from P202.1 billion.
Including extraordinary items, consolidated net income slipped 3% to P14.2 billion from P14.6 billion.
Shares in GT Capital closed flat at P1,150 apiece on Wednesday. —