HK: EmergeVest marks first exit from apparel maker JDU with 2x returns

An employee counts U.S. dollar banknotes at a foreign exchange house in Ciudad Juarez, Mexico, November 8, 2016. REUTERS/Jose Luis Gonzalez

Hong Kong-based private equity firm EmergeVest has exited its investment in Chinese apparel supplier J.D. United Holdings Ltd (JDU) as part of the merger of latter with Taiwan-listed Roo Hsing Co., Ltd., it announced on Thursday.

Marking its first exit, EmergeVest completely withdrew its investment in JDU, generating more than 2x invested capital and an IRR above 25%, the company said in a statement. Other financial details of the deal were not disclosed.

Headquartered in Changzhou, Jiangsu, JDU has 25 manufacturing facilities across Asia and Africa, producing apparel for international brands and retailers, such as Levi Strauss, Gap, Fast Retailing, Primark and C&A.

Post merger, Roo Hsing, a denim manufacturer, will have a combined revenue above $500 million.

“We are delighted to have helped JDU management make such significant progress in growing the business. We wish the enlarged company well for the future,” Roger Moh, Managing Director at EmergeVest, said.

EmergeVest first invested in JDU in 2014 and supported the company’s expansion with additional capital in 2015. During its investment period, the private equity firm reorganized JDU’s shareholding structure, buying out a previous private equity investor, optimized JDU’s balance sheet, financed expansion into new markets and product categories, and managed the merger with Roo Hsing, the statement added.

Richard Sun, CEO at JDU, said: “I would like to express my gratitude toward EmergeVest and its partners for their support. EmergeVest has enabled us to capitalize on growth opportunities, culminating with the merger with Roo Hsing. We are well positioned for future development.”

EmergeVest was advised on the transaction by Ropes & Gray.

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