VinaCapital’s Vietnam Opportunity Fund (VOF) and Japanese private equity firm Daiwa PI Partners (DPIP) are planning to acquire a joint 70 per cent stake in the Vietnam-based dairy company International Dairy Products JSC (IDP) for $45 million.
According to an official statement by VOF, about 80 per cent of the total investment in this deal is led by VOF, but the exact percentage of equity stake that each party holds remains undisclosed.
After the deal is sealed, IDP, which has recently launched its Love In farm brand, will have an increased capital up to VND 460 billion ($21.5 million). Of this, 70 per cent will belong, jointly to the VOF and the DPIP. The remaining 30 per cent equity stake will stay with IDP promoter Nguyen Tuan Khai, chairman of IDP, and his family members.
According to IDP, the capital that will be acquired in this new round of financing will be used to purchase machinery and equipment for the expansion of the two existing plants in Ba Vi and Cu Chi province. The funds will also be used as working capital and for expansion opportunities in the overseas markets
This marks DPIP’s first investment in Vietnam. The company representative said that they will help IDP connect with leading dairy businesses in Japan, helping with IDP’s production technology. DPIP also plans to leverage IDPs distribution system to market Japanese dairy products in Vietnam, and vice versa.
IDP, which was established in 2004 with a factory in Hanoi, has three production facilities in both Hanoi and Ho Chi Minh city. Two of these are the largest fresh milk production hubs in the country. IDP specializes in producing and selling UHT milk, pasteurized fresh milk, spoon and drinking yogurt, using the latest technology from Europe.
Currently, IDP taps into co-operative of about 2,000 farmers, collecting more than 75 tonnes of fresh milk per day for dairy production under such brands as Love’in Farm, Ba Vi, and Love’in Farm KUN. Management expects total revenue to exceed $80.0 million for 2014.