VinaCapital acquires stake in poultry firm Ba Huan for $32.5m

VinaCapital’s flagship fund Vietnam Opportunity Fund (VOF) has invested $32.5 million to acquire a significant minority stake in Ba Huan JSC, the country’s leading eggs and poultry meat producer.

In its latest announcement, VOF said it may also invest a moderate amount of additional capital during the next twelve months as the company delivers on mutually agreed milestones.

“This private equity investment is consistent with our strategy of focusing on companies operating in the sectors of the economy benefitting from strong domestic growth,” said Andy Ho, Managing Director of VOF.

Vietnamese food and beverage companies, in particular, have tremendous growth opportunities ahead of them as consumers spend more on high-quality, healthy products. Ho stressed that Ba Huan is well-positioned to capitalize on these trends.

Established in 2001, Ba Huan accounts for 30 per cent of Vietnam’s pasteurized egg market share and is said to be a household brand. The company has made significant investments in its operations, importing modern production lines from Europe and adhering to international standards. In 2018, it expects revenue to surpass $90 million.

Ba Huan’s General Director, Pham Thi Huan, holds 63.96 per cent of the company’s shares. Hawke Investment Fund (allegedly related to VinaCapital) holds a 16.39 per cent stake in the company. The rest is held by other individuals.

The deal saw VinaCapital value Ba Huan at nearly $200 million, double the market value of its rival Dabaco Vietnam JSC, which is believed to account for more than 5 per cent of Vietnam’s egg market share.

Founded in 2003, VinaCapital is a leading investment and asset management firm headquartered in Vietnam, with a diversified portfolio of $1.8 billion in assets under management.

Ba Huan JSC operates two fully enclosed industrial poultry farms, including a layer farm with over 1.5 million chickens for commercial egg production, and a broiler farm with over 400,000 chickens for meat production.

Each day, Ba Huan supplies over 1.7 million eggs, delivers over 15,000 chickens, and processes over 25 tonnes of fresh poultry meat. Its products are distributed to over 2,000 agents and points of sales throughout Vietnam.

Egg consumption is on the rise in Vietnam, with both chicken and duck eggs popular, according to Poultry World. Chicken consumption is also increasing, growing at a compound annual growth rate of 8.6 per cent, according to DBS Bank, and local producers have struggled to meet demand.

VOF recently invested approximately $45 million into two subsidiaries of PetroVietnam — PV Power and Binh Son Refining and Petrochemical (BSR) — as part of their initial public offering (IPOs) conducted in January.

“We participated in PV Power and BSR because we feel that the upside potential is very strong and these assets are poised to deliver an IRR north of 25 per cent over a three to five year period and maybe even longer,” Ho told DEALSTREETASIA in an interaction.

Also Read:

VinaCapital invests $45m in PV Power, Binh Son refinery in January IPOs

VOF & DPIP invest $45m into dairy co IDP

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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.