Private equity firm CVC Capital partners has acquired 100 per cent of Malaysian homegrown snack brand Munchy parent in a deal that has paved an exit for founders and investors including state pension fund KWAP.
Prior to the acquisition, Munchy was 70 per cent owned by its founders while fund investor TAP Crunch Sdn Bhd – a joint vehicle between PE firm Tremendous Asia Partners Group and civil servant pension fund KWAP held the remaining 30 per cent stake.
The deal, which involves the buyout of Munchy Food Industries and its subsidiary Munchworld Marketing Sdn Bhd by the private equity player, was completed on June 8, 2018, according to a press release.
Bloomberg first reported the deal, saying the $250 million acquisition could value Munchy at RM1.1 billion ($283 million).
Despite the change in ownership, the management team, personnel and business operating system are fully retained, and are led by CEO Rodney Wong together with COO Rajan Pillai. The board of Munchy will now comprise of representatives appointed by CVC Asia IV.
“There were many offers from potential investors in the past, but CVC’s vision for the brand aligned extremely well with our identity. Their global network and experience will be invaluable in growing the Munchy’s brand into a global name – with new markets, new technology and new innovations,” said L K Tan, co-founder of the 25-year-old brand Munchy.
While CVC Capital managing director Alvin Lim commented: “This is an exciting opportunity to invest in a leading player with a consistent track record of growth and a highly cash-generative business. Over the years, Munchy has built an exceptional platform with proven scalability to meet the demands of the company’s growing consumer base.”
Founded in 1991, Munchy has a distribution reach of over 50 countries, with over 25 years history in the biscuits and confectionary business. Its products include Munchy’s, Oat Krunch, Lexus, Muzic and Choc-O. According to Nielsen, Munchy had a 21.5 per cent share of Peninsular Malaysia’s RM1.044 billion ($260 million) biscuit market in 2017.
Meanwhile, further consolidating its presence in the FMCG space, CVC is said to have also invested in Indonesia’s top snacks maker PT GarudaFood Putra Putri Jaya. With this, CVC Asia IV has made five investments in the past 12 months.
In Malaysia, CVC holds a 24 per cent stake in QSR Brands (M) Holdings Sdn Bhd, which operates over 750 KFC outlets in Malaysia, Singapore, Cambodia and Brunei, as well as over 450 Pizza Hut outlets in Malaysia and Singapore.
The remaining stakeholders in QSR are Johor Corp and pension fund Employees Provident Fund, which hold 51 per cent and 24 per cent, respectively.
In other recent deals in the FMCG space in the region, OldTown Bhd was bought over by Jacobs Douwe Egberts (JDE) last December for about $361 million. JDE, a unit of Netherland-based Jacobs Douwe Egberts B.V, offers well-known coffee and tea brands like Jacobs, Tassimo, Moccona, Senseo, L’OR and Douwe Egberts in over 120 countries.
In another deal, Malaysian government-linked PE fund management company Ekuinas had in 2016 divested its entire 20 per cent equity in Alliance Cosmetics Group (ACG) to local PE firm Navis Capital Partners for RM61.8 million ($15.45 million). ACG was Ekuinas’ maiden investment in the FMCG segment.
Last April, Navis through its premium grocery brand Village Grocer, acquired smaller local rival Bens Independent Grocer from conglomerate The Big Group.