Malaysian private equity firm Creador has invested $73m in Sapphire Foods India Ltd, one of the largest franchisee operators of YUM! Brands in the Indian sub-continent.
Sapphire Foods India operates a total of 437 KFC, Pizza Hut, and Taco Bell restaurants in India, Sri Lanka, and the Maldives.
The company is backed by a consortium of private equity firms including Samara Capital, Goldman Sachs Asset Management, CX Partners, and Edelweiss Private Equity.
The investment marks Creador’s foray into India’s fast-growing quick-service restaurant (QSR) sector and is being made through a combination of direct investments into Sapphire and a secondary purchase of shares in the company.
“This is the ideal time to be investing in the Indian subcontinent’s burgeoning quick service restaurant (QSR) industry. The pandemic has spurred a transformative change in consumer buying patterns, with consumers migrating from the independent food sector to internationally-recognised brands like KFC, Pizza Hut, and Taco Bell, a strong emphasis on food safety and hygiene, and omnichannel accessibility,” said Creador’s managing director and co-head for India Kabir Thakur.
He added that QSR is the fastest-growing segment among foodservice chain formats in India, where global QSR brands dominate.
Thakur also gave some figures on the QSR market in India which has been growing at 19% during the last few years. However, eating out frequency is significantly lower at 1.5-2 x per person per month vs 7-9x in other developed markets.
The QSR market in India is expected to grow at over 20% over the next four years, he forecasted.
In July, DealStreetAsia reported that Creador secured the first close of its fifth fund at $500 million and is looking to announce three new deals in August.
The fundraise marks the firm’s largest first close to date, bringing its assets under management to about $2 billion. The source said the fund is on track to make its final close by the end of this year with a corpus of $680 million.
Creador launched its fifth fund in March. Its predecessor fund had closed after securing around $565 million in July 2019, exceeding its hard cap of $550 million.
The PE firm recently made headlines for divesting 50% of its stake in credit reporting agency CTOS Digital Bhd as the company made its debut on Bursa Malaysia. In June, Creador picked up a 30% stake in Malaysia’s Loob Holding, which owns the Tealive bubble tea brand.