VinaCapital boosts F&B investments, to buy Quang Ngai Sugar?

VinaCapital, visual from company homepage

VinaCapital’s Vietnam Opportunity Fund (VOF) has said that it will increase private equity investment and holdings in the OTC (over-the-counter) market, focusing on the food and beverage sector.

The food and beverage industry in Vietnam “anticipates strong earnings growth as consumers benefit from low inflation, increased spending power and wealth creation”, VOF wrote in a report.

The fund revealed its size of investment often ranged between $10-40 million, which it described as “meaningful size”.

Late last year, it made a $45 million co-investment with Japanese private equity firm Daiwa PI Partners to acquire 70 per cent of International Dairy Products, which VOF called the “mini-Vinamilk”.

Also read: VOF & DPIP invest $45m into dairy co IDP

In August 2014, VOF divested 3.6 million shares from Vinamilk, Vietnam’s leading company in the dairy product market, at VND123,333 ($5.77) per share, gaining a 9.7 per cent premium. After the transaction, however, Vinamilk still tops the fund’s listed holdings, representing 11 per cent of its net asset value as of January 31 (79 million out of the total $739 million).

In the process of strengthening its presence in the sector, VOF has been negotiating to purchase a 2.6 per cent stake in another Vietnamese leading food and beverage company, planning to increase the stake gradually to 5 per cent for $23.2 million.

The target firm is traded on the OTC market, with an implied market capitalisation of $391 million, generating revenue and profit of $305 million and $38 million, respectively, last year. It has gained a dominant market share of 78 per cent in the drink producing segment, the fund said.

Experts in market have predicted the target company is possibly Quang Ngai Sugar Company. According to the company’s latest annual financial report for 2013, its revenue and profit reached VND5.54 trillion ($260 million) and VND582.5 billion ($27.35 million).

It has leading products in the Vietnamese soymilk market such as Vinasoy and Fami.

DEALSTREETASIA contacted VinaCapital but the fund declined to comment, while an executive from Quang Ngai Sugar could not immediately respond.

If it is not Quang Ngai Sugar, there is another possibility of Tan Hiep Phat, a comparatively large beverage company with last year’s revenue at $300 million and popular bottled tea brands such as Dr Thanh, Olong Tea Plus and Zero Degree.

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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.

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Following vacancies can be applied for (only in Singapore).   

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  • 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. 
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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.