General Atlantic enters Indonesia, buys MAP $75m bond

Photo by Mitra Adiperkasa

US-based investment firm General Atlantic will tap Indonesian market for the first time. It has agreed to subscribe to Rp1.08 trillion ($75 million) in bonds issued by PT Mitra Adiperkasa (MAP) Tbk (MAPI), the local operator of global brands such as Starbucks and Cold Stone.

According to the agreement, MAP will consolidate four food and beverage (F&B) units under a new subsidiary called PT MAP Boga Adiperkasa (MBA). The total equity of the four units is Rp 170 billion.

MAP and the new holding company will then issue zero-coupon bonds that will be absorbed by General Atlantic, who will be given the option to convert them into shares totaling 29.9 percent of MBA when it goes public.

MAP vice president VP Sharma did not specify a timeline for the initial public offering (IPO), but said General Atlantic has committed to stay in the long term, maybe for “four to six years”. The deal itself is expected to close by year-end.

“Why did we pick General Atlantic? We share the same values, the same criteria. That was what we were looking for in a partner,” said Sharma in Jakarta.

General Atlantic, which boasts $18 billion of assets, has investments in Uber, Airbnb, Snapchat, and many other technology companies.

Sharma added that the fresh funds will be used to expand the Starbucks chain and the F&B business in general. The company is aiming to open 50 to 60 Starbucks stores per year for the next couple of years.

The MAP’s food and beverage segment, which also includes Pizza Express, Krispy Kreme, and Godiva, contributed about 18 per cent to the company’s operating profit in 2015. This is after MAP sold part of its stakes in Burger King and Domino’s Pizza to QSR Indoburger and Everstone Capital Asia.

However, F&B business director Anthony Cottan believes there is still promising future for the segment. He said there is “a lot of potential” to grow the brands.

“The majority of our food and beverage business is Starbucks with only 242 stores across the country. That is just the beginning of our journey. Look at China and Japan who have at least 1,000 stores each,” he said.

The group earned Rp 12 trillion in revenue last year. After 25 years of operation, MAP now has around 2,000 physical stores scattered around 60 cities in Indonesia.

MAP landed a similar deal with CVC Capital Partners for its sports and kids’ clothes businesses in 2015. It issued Rp 1.5 trillion in bonds to Montage Company Limited, a unit of CVC, who has the option to convert them into 30 per cent of shares in five years time.

CVC is a global private equity and investment firm that had successfully invested in PT Matahari Department Store Tbk (LPPF) – an Indonesian retailer controlled by the Lippo Group. It profited from its investment in 2013 in a major offloading through a $1.3 billion IPO.

Also Read:

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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.

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.