Aureos Capital to sell 21% stake in Pancake house

Five-year life of fund for SME ventures expiring

AUREOS Capital Ltd. plans to sell its 21-percent stake in publicly listed casual dining chain Pancake House Ltd. as it unwinds a fund invested in small-and medium-sized enterprises in emerging markets.

The stake is now valued at about $11.58 million based on the market capitalization of Pancake House. This is more than double Aureos’ investment in the company.

Aureos spent $4 million to acquire a 21-percent stake in Pancake House in 2005.

“The divestment is in accordance with the expiration of the five-year life of the Aureos Capital Fund,” Pancake House said in a disclosure to the Philippine Stock Exchange.

Aureos’ investment in Pancake House was then used to acquire a second brand—teriyaki Boy.

As of yesterday, Pancake House had a market capitalization of P2.37 billion based on its latest traded price of P10 per share.

Aureos Capital is a private equity fund management company specializing in investing in small- and medium-sized businesses in emerg- ing markets. It typically generates deals with businesses that stand out—usually family-owned, with at least five to seven years of history, often a niche market leader and always with a good track record.

The goal upon exit is not only to sustain growth but also to achieve a high valuation and minimal residual liability.

Early last year, the fund also infused $4 million into the Daniel O. Mercado Medical Center in exchange for a 33-percent stake. Also last year, it acquired a 35-percent stake in the Hortalezas’ personal care store chain HBC Inc. for about $7 million.