HK-based PE firm Affinity to sell partial stake in Leong Hup IPO

Photo by Erol Ahmed on Unsplash

Hong Kong-based private equity firm Affinity Equity Partners is cutting its stake in Malaysian poultry producer Leong Hup by offloading 421 million shares in the planned IPO in mid-May, according to a prospectus filed by the latter.

Affinity, which acquired a minority stake in Leong Hup in 2014, will see its holding fall from 23 per cent to 9.89 per cent after selling the shares, according to the prospectus.

Leong Hup is offering 937.5 million shares, representing up to approximately 25.68 per cent of the company’s enlarged issued share capital, at 1.10 ringgit apiece.

The IPO size includes the overallotment option, and Leong Hup said a majority of the proceeds from the new shares issued will go into capital expenditure to facilitate growth expected in its regional operations. The overallotment shares amount to another 15 per cent of shares.

Leong Hup, which is set to list on the Kuala Lumpur stock exchange on May 16, has secured 10 cornerstone investors, including domestic pension fund Employees Provident Fund, insurer AIA Bhd and European commodities house Louis Dreyfus Company.

The company is one of the largest fully integrated producers of poultry, eggs and livestock feed in Southeast Asia. Currently, Leong Hup is present in five countries – Malaysia, Singapore, Indonesia, Vietnam, and the Philippines.

Affinity Equity Partners is an independent private equity firm focused on traditional buyout and control oriented investments across Asia-Pacific valued up to $1 billion. Sectors of interest include businesses in consumer-related goods and services, value-added manufacturing, healthcare, financial services, and business services.

Affinity, which was spun out of UBS Capital Asia Pacific in 2004, has to date completed $15 billion in aggregate transaction value, it says on its website.

It recently agreed to acquire a majority stake in South Korea-based ServeOne, a management, repair, and operation unit under LG Group, for W602 billion ($535 million).

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