Hong-Kong listed Huabao entered into a share purchase agreement with a consortium led by Asian private equity firm Unitas Capital on June 28, which holds an 80 per cent stake in JiaHao Foods, for the sale.
Huabao is primarily engaged in research and development, production and sale of flavours for tobacco, food, and personal care; fragrances, tobacco raw materials; and ingredients as well as tobacco products.
“The company believes that the growth in condiment is expected to be driven by foodservice market growth as well as greater use of condiments by restaurants to satisfy a more affluent and discerning customer base. The condiment market is expected to see an acceleration in ‘consumption upgrades’ to higher-end condiment products as chefs increasingly place a greater emphasis on taste, convenience and consistency.
“In addition to being an attractive standalone product category, participation in the condiment segment is expected to provide the Group with a strategic platform to develop a deep and nuanced understanding of localized taste profiles and cooking methods,” said Huabao.
It added that the Unitas-led consortium has transformed Jiabao as a family-owned and operated business to a “best-in-class, professionally managed” business to business-branded condiments platform and has emerged as a pre-eminent supplier of condiment products to more than 200,000 restaurants across China.
Other companies including Hormel Foods Corp, Chinese buyout firm Citic Capital and Hony Capital were among suitors said to be weighing potential bids for Jiahao, reported Bloomberg.
Founded in 1994, Zhongshan-based Jiabao produces wasabi paste, concentrated fruit juice, chicken bouillon and functional soy sauce, through its three main brands – Jingba, Jiahao, and Zhanwang.
Unitas Capital, which manages more than $4 billion, has made more than 30 investments across Australia, Korea, Japan and Singapore since its founding nearly two decades ago, its website shows. It has bought stakes in Haitai Confectionery & Foods Co., the South Korean manufacturer of snacks and chewing gum.
The firm exited its Shanghai-based restaurant chain Jiayo Noodle House to international hotel owner and operator GreenTree Inns Hotel this April for an undisclosed sum.