Malaysia-based private equity firm Creador, which is focused on investing in India and SE Asia, is lining up an exit plan for its investment in Indonesian cereal producer Simba Indosnack Makmur (Simba Food) in 2021, two executives aware of the development told DealStreetAsia.
Creador acquired 100 per cent stake in Simba Food from Indian consumer goods company Godrej Consumer Products Limited (GCPL) for $35 million, according to a media report in 2013. The company recorded $22 million worth net sales in 2012 when Creador took over the company, according to the PE firm’s website.
Creador may launch the formal sale process by end of 2020, and appoint an external advisor around the same time. DealStreetAsia reached out to Creador but their spokesperson declined to comment on the matter.
Creador is expected to conduct a complete exit from the snack food producer. The PE firm is said to be mulling the trade sale option instead of bringing Simba Food to list on the local stock exchange.
Typically, PE firms or foreign investors choose the IPO option to monetise their investments due to the high rate of capital gains tax for private companies in Indonesia.
“However, food sector companies like Simba are interesting for strategic players rather than public stock investors,” said one of the executives mentioned above.
Simba Food produces cereal, snacks, and instant food products under the Simba and Turbo brands. The company is said to be the second-largest player in the cereal products segment in Indonesia competing with global FMCG brand Nestle. Simba’s cereal brand is pitted against Nestle’s Koko Krunch in the country.
Currently, Simba’s cereal products hold 35 per cent market share in the country, according to one of the executives mentioned above. Meanwhile, according to a media report in 2014, Nestle’s Koko Krunch controlled around 60 per cent market share in the geography.
Other prominent cereal brands in the country include Energen from local company Mayora Indah, and GoVit Sagon Cereal from Indofood CBP Sukses Makmur.
Simba Food is Creador’s second investment in Indonesia after it acquired a minority stake in Indonesia’s satellite-based paid TV company MNC Sky Vision in 2012. Following these investments, Creador has backed several firms including multi-finance company BFI Finance, Bank Index, dairy product company Cimory and maternity hospital chain Hermina.
In July 2019, DealStreetAsia reported Creador has collected around $565 million for its fourth fund, Creador IV, which exceeded its hard cap of $550 million. Creador IV launched in early 2018 and plans to invest across South and Southeast Asia countries with around 20 per cent of the proceeds proposed to be allocated to Vietnam.
Creador first raised a $130-million fund in 2013 followed by a $331-million second fund that was backed by Hamilton Lane, Siguler Guff, and Quilvest, as well as a Malaysian pension fund and a US-based endowment fund.