Indonesia’s Asafoods in talks with PE, strategic firms to divest majority stake

Rye bread in a bakery. Pixabay.

Indonesian food company PT Asa Foodenesia Abadi (Asafoods) is in talks with a host of private equity firms and strategic firms to divest a majority stake in the company, a source privy to the development told DealStreetAsia.

The company’s founder Eddy Sutanto and his family could offer up to 60 per cent stake for around 85 billion rupiah ($6 million). “It will be a combination of old shares divestment and new shares issuance,” the source added. The proposed transaction could peg the total valuation of the company in the range of 130 billion rupiah ($9.2 million).

A local fund is understood to have already evinced interest in the company even as no agreement has been reached. The family has not hired any external advisory firm to run the stake sale process, added the source.

Eddy Sutanto and his family own an 81 per cent stake in Asafoods, while the remaining is held by Japan’s Mitsui Global Investments. The family wants to retain a minority stake in the company if the proposed transaction fructifies.

In April 2013, Mitsui had announced its investment in Asafoods, along with the archipelago’s state-owned arm Danareksa Capital as its co-investor.

However, Danareksa Capital is said to have exited the company late last year, following a restructuring of its holding company PT Danareksa (Persero), the source added.

When contacted, the spokesperson at Asafoods declined to comment on the matter.

The founder family’s plan to sell their stake comes as they seek to expand their food delivery business that operates under cloudough.id platform. Currently, the platform sells Asafoods’ bakery products online.

Indonesia’s revenue in the bread segment is expected to touch $12.9 billion in 2020 and the market is expected to record 1.4 per cent CAGR in 2020-2025, according to a report by Statista. Meanwhile, the average per capita consumption stands at 39.4 kg this year.

Following the COVID-19 pandemic, a lot of Indonesian bakery businesses have had to struggle for survival since most of these players are mom-and-pop stores that saw meagre footfall.

In 2020, Asafoods is expected to earn revenue of around Rp17 billion ($1.2 million), recording a nearly stagnant growth from Rp16 billion ($1.1 million) last year. The company’s revenue stood at Rp32 billion ($2.27 million) in 2018, which plummeted after South Korean bakery franchise Tous Les Jours discontinued its partnership with them.

Currently, Asafoods’ bakery brands include DailyLoaf, which is sold through cloudough.id. Besides, the company also produces private brands owned and sold by some retail chains such as FamilyMart, Hypermart, Lotte Mart, Superindo, among others.

Besides cloudough.id, Eddy Sutanto and his family plan to set up a food delivery platform to target the casual fine-dining restaurant space in Indonesia.

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.