Private equity firm CVC Capital Partners has reportedly invested in Indonesian food and beverage company GarudaFood Group, as it aims to broaden its presence further in the fast-growing economy of Southeast Asia.
Taking an interest on the growth potential of GarudaFood’s peanuts, wafer sticks, and cracker products, sources familiar with the matter stated on Tuesday that CVC decided to invest about $150 million in the food maker.
GarudaFood is currently no. 1 in Indonesia’s market for savory snacks, with a market research firm expecting that market to expand by 40 percent in five years to 2022 to hit at $2.4 billion.
CVC’s move came at a time when foreign investors are expecting the economic growth in Southeast Asia will help boost demand for high-end consumer products.
Data from an international development bank showed that the region’s economy rose to 5.2 percent in 2017 against 2016’s 4.7 percent, and is forecast to expand at the same rate this year and the next.
The move also came ahead of a planned initial public offering (IPO), according to the people. It was reported in the prior year that GarudaFood was seeking a potential domestic IPO as well.
An official at CVC refused a request for a statement on the matter, while a representative for GarudaFood could not be immediately reached for a comment.
CVC Completes Acquisition of Munchy
CVC has also reportedly finished its acquisition deal with Malaysia’s snack-food manufacturer Munchy Food Industries Sdn Bhd for approximately $250 million.
The people with knowledge of the matter said the Luxembourg-based firm decided to buy Malaysia’s second-biggest food maker partly due to the potential of its strong export business.
If confirmed, the deal would leave locally listed special-purpose acquisition company (SPAC) Red Sena Bhd another several months to find its qualifying asset. It was reported in March that Red Sena was aiming for a takeover of Munchy, as it was looking for a way to enter the food and beverage industry.
Munchy’s products are currently sold in more than 50 countries, and it had a 14 percent share of the country’s $112 million biscuit market in the previous year.
A spokeswoman for Munchy said she could not comment yet about the acquisition.
Including CVC’s investments in GarudaFoods and Munchy, sources stated that the CVC Asia IV has carried out a total of five investments for the past 12 months.
That included a stake in Japanese relaxation spaces operator Riraku Co. Ltd. in December, and an investment in Vietnam’s Asia Commercial Bank (ACB) in January. The company has also entered an agreement in May to acquire US online trading platform OANDA Global Corp.
In addition, CVC also has a 24 percent stake in Malaysian restaurant operator QSR Brands (M) Holdings Sdn Bhd, which operates over 750 KFC restaurants in Malysia, Singapore, Cambodia, and Brunei, as well as over 450 Pizza Hut restaurants in Malaysia and Singapore.
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