AUGUST 2014

EURO-ASIA M&A TRENDS

  • Acquisitions by global sovereign wealth funds (SWFs) total USD 15.2 Bn in 2014 YTD, down 4% from 2013 YTD (USD 15.7 Bn).
  • Singapore is the top acquiring nation for SWF acquisitions with USD 8.8 Bn in 2014 YTD, up 69% from 2013 YTD and the highest YTD level since 2009 ($10.8bn). China and United Arab Emirates follow with $2.6bn and $1.5bn, respectively
  • Singapore is the top acquiring nation for SWF acquisitions with USD 8.8 Bn in 2014 YTD, up 69% from 2013 YTD and the highest YTD level since 2009 ($10.8bn). China and United Arab Emirates follow with $2.6bn and $1.5bn, respectively.
  • Temasek Holdings’ USD 5.7 Bn acquisition of a 25% stake of AS Watson Holdings announced in March is the largest global SWF M&A deal in 2014 YTD and the 8th biggest global SWF M&A transaction on record.
  • Retail is the most targeted sector for SWF acquisitions with USD 6.2 Bn in 2014 YTD, more than double from 2013 YTD (USD 2.4 Bn) and the highest YTD level on record. Finance and Food & Beverage follow with USD 3.9 Bn and USD 1.9 Bn, respectively.

As a result of the impressive Q2, H1 was the strongest half year on record with deals valued at USD 286.7 Bn, (+56.8% vs. H1 2013).

Source: Dealogic

FOOD & BEVERAGE

Dairy

F&N (Singapore) increases stake in VINAMILK (Vietnam)

Singapore-listed company FRASER AND NEAVE acquired 15 million shares in Vietnamese diary group VINAMILK.
VINAMILK is Vietnam’s largest dairy company. It is vertically integrated, and produces & distributes a variety of milk products including condensed milk, powdered milk, fresh milk, and soy milk, as well as ice cream and cheese. It also exports powdered milk to the Middle East, Cambodia, the Philippines, and Australia.
F&N now owns 11.04% of VINAMILK (9.54% before the deal). This is the second deal for VINAMILK in less than a year, after a USD 70 M secondary placement in December 2013.
The PER multiple of 18.5x is lower than the one of other dairy producers; 19.6x for DANONE, 41.3x for FONTERRA.

August 18th / Finance Asia


Beverage

MASSIMO ZANETTI BEVERAGE GROUP (ITA) has acquired 100% of BONCAFE (SIN) for USD 85 M

One of the world’s top coffee firms MASSIMO ZANETTI BEVERAGE GROUP (MZBG) has acquired 100% of BONCAFE, a leading gourmet coffee manufacturer & supplier in South-East Asia & the Middle East, in a USD 85 M (SGD 106 M) deal which includes BONCAFE’s roasting plants in Singapore & Thailand.
BONCAFE, established in Singapore since 1962, employs today about 60 staff in Singapore & 400 in Thailand.
BONCAFE is one of the 25 brands acquired by MZBG. This acquisition is supposed to help to reinforce its presence in the Middle East & Southeast Asia, with a particular focus on Indonesia, Vietnam, Cambodia, Singapore, Thailand, Malaysia, Hong Kong & the UAE.
BONCAFE
EBITDA (FY2013): USD 7 M
EV/EBITDA (estimated) ~12x

August 4th / ASIA ONE BUSINESS


Retail

DAIRY FARM INTERNATIONAL (HK) agreed to buy a 20% stake in YONGHUI SUPERSTORES (CHI) for USD 925 M

DAIRY FARM INTERNATIONAL HOLDINGS LTD., an operator of supermarkets and retail stores, is paying RMB 5.69 Bn (USD 925 M) to buy a 20% stake of YONGHUI SUPERSTORES CO.
The hypermarket industry in China is expected to grow by 39% in 2016 from last year. DAIRY FARM INTERNATIONAL intends to benefit from China’s growing consumer market thanks to this strategic partnership.
YONGHUI SUPERSTORES operates 288 hypermarkets and supermarkets across 17 provinces. The 2 groups will collaborate on areas such as procurement, private label product development, fresh food processing & store development.

EV (estimated): USD 4.6 Bn
EBITDA (FY2013): USD 262 M)
EV/EBITDA (estimated): ~17.7x

July 18th / WSJ

METRO AG (GER) agrees to sell its wholesale stores in Vietnam to BERLI JUCKER PCL (THA) for EUR 665 M

METRO is selling its 19 Vietnamese stores to BERLI JUCKER, a Thai consumer-goods distributor controlled by tycoon Charoen Sirivadhanabhakdi for an enterprise value of EUR 665 (USD 876 M).
METRO intends to strengthen its balance sheet with this deal, abandoning one of their least-developed markets to focus and to invest in growth. Acquiring 19 wholesale stores with about 3,600 employees across Vietnam, BERLI JUCKER will become the second-largest retailer in the grocery market in Vietnam after domestic retailer SAIGON CO-OP.

EV/Sales: ~1.25x

August 7th / Bloomberg

HEALTH & BEAUTY

Cosmetics

BO:HO GREEN (France) raises EUR 1 M from ALTER EQUITY (France)

BO.HO GREEN, a Lyon-based cosmetics & make-up brand has raised EUR 1 M to finance its growth.
BO.HO GREEN produces & distributes eco-friendly & natural make-up products.

Revenue (2013): EUR 1 M

August 30th / Fusacq


Pharmaceuticals

HONY CAPITAL (China) plans a USD 535 M stake sale in CSPC PHARMACEUTICAL GROUP (China)

Chinese PE firm HONY CAPITAL will sell a stake of its shares in CSPC PHARMACEUTICAL for over USD 500 M. The deal will add to the first USD 569 M that HONY has raised from the sales of shares in CSPC in May.

CSPC PHARMACEUTICAL GROUP
Market cap (as of 28/08/2014): USD 5.2 Bn
EV (estimated): USD 5 Bn
Revenue (LTM as of 30/06/2014): USD 1.3 Bn
EBITDA Margin: ~20%

August 28th / Reuters

ENGINEERING & CLEANTECH

Engineering & Construction

OCBC (Singapore) in talks with Thai billionaire Charoen group to sell UNITED ENGINEERS stake

OCBC is in talks with a group linked to Thai tycoon Charoen SIRIVADHANBAHKDI for the sale of its stake in the Singaporean property, engineering & construction group UNITED ENGINEERS LTD, according to people familiar with the matter.
OCBC has nearly a 36% stake in UNITED ENGINEERS which is listed in Singapore.
Charoen SIRIVADHANBAHKDI’s group of companies include: THAI BEV (THA), FRASER & NEAVE (SIN), properties such as the PANTIP PLAZA mall in Bangkok, the PLAZA ATHENEE in Manhattan & other hotels in Asia, as well as many other businesses like the retail & trading company BERLI JUCKER (which acquired METRO’s retail business in Vietnam c.f. PR of 13/08 sent by Eymeric)
UNITED ENGINEERS LTD is a Singapore-based group offering Integrated Property Services, Engineering & Construction with operations in ASEAN.

UNITED ENGINEERS
EV (Estimated): SGD 4.2 Bn
Revenue (FY2013): SGD 2 Bn
EBITDA Margin: ~10%

August 21st / Reuters

PARTNERS GROUP HOLDING AG (CH) agrees to buy the majority of SAVERA GROUP (ESP) for around RMB 2 Bl (USD 325 M)

Swiss investment manager PARTNERS GROUP HOLDING AG has agreed to buy a majority stake in SAVERA GROUP, a China-focused elevator guide rail maker, for around RMB 2 Bl (USD 325 M).
This is the first buyout in China for the asset managers. SAVERA began focusing on Europe but now generates 80% of revenue in China. This latest deal values SAVERA at around USD 433 M.

August 18th / Reuters


Water Treatment

PANASONIC (Japan) & TATA GROUP (India) collaborates in water treatment

PANASONIC & TATA GROUP will develop a water purification system to tap into a fast-growing market in Asia.
PANASONIC has developed a device (prototype stage) that will detoxify harmful substances in groundwater, making it potentially potable. The compact system can be carried in a small truck & has been designed to serve mall rural villages in India. PANASONIC & TATA GROUP aim to commercialize the system by 2019.

August 30th / Channel News Asia

Renewable Energy

Collaboration between HAREON SOLAR TECHOLOGY and NEREUS CAPITAL

HAREON SOLAR TECHNOLOGY and NEURUS CAPITAL, an Indian energy fund, agreed to collaborate to develop more than 150 MW of solar power projects in India over the next 2 years.
The alliance follows HAREON’s recent announcement that it will set up a subsidiary in India to invest in photovoltaic projects across the country. India is a compelling and growing market for solar photovoltaic projects.

August 26th / AVCJ

NEW TECHNOLOGIES

Payment Solutions

AMAZON launches Local register, a SQUARE competitor with lower transaction rates

Local register provides users a free app and a USD 10 card reader, and charges merchants and anyone who uses it to sell services just 1.75% per swipe on both credit and debit transactions, as long as users sign up before October 31st. This special rate is a full percentage point lower than SQUARE’s 2.75% per swiped transaction (3.5% plus 15 cents for manual entry), and will last until January 2016, date at which it will return to the standard 2.5% per transaction Amazon is charging (or 2.75% for manually entered transactions).
The USD 10 fee that Amazon is charging for people to buy its reader is actually compensated by the fact that Amazon grants users of its payment system USD 10 in transaction credit.

August 13th / Techcrunch


E-Commerce

FLIPKART (India) raises USD 1 Bn in new funding

India’s largest e-commerce player FLIPKART has raised USD 1 Bn in fresh funding from existing investor TIGER GLOBAL MANAGEMENT as well as from new investors GIC, the Singaporean sovereign wealth-fund, & MORGAN STANLEY INVESTMENT MANAGEMENT. Other minor investors are NASPERS (RSA), ACCEL PARTNERS INDIA, ICONIQ CAPITAL & SOFINA (BEL)
The funds will be used to hire more engineers & expand mobile technologies.
The company is now estimated to be worth over USD 5 Bn (vs. estimated EV of 2.5 Bn in May 2014).

July 29th / WSJ

CARLYLE (USA) invests in GANJI.com (China)

PE firm CARLYLE has made a minority investment in Chinese online & mobile-based classified ads operator GANJI.com. Equity for the investment came from its fund CARLYLE ASIA PARTNERS IV.
GANJI has raised around USD 100 M in this 6th round of funding, bringing the total of funds raised to USD 200 M since 2005. Previously the company has received funding from SEQUOIA, CAPITAL TODAY, CITIC PE and MACQUARIE.
The Online Classifieds business in China has been very active this year with GANJI’s competitors BAIXING.com & 58.com also receiving VC &E funding.
Details of the transaction were not disclosed.

July 21st / Tech in Asia


Internet

Chinese trouser manufacturer BAIYUAN TROUSERS acquired E-Commerce firm SHENZEN GLOBALE-GROW

Malaysian webhosting company EXABYTES has acquired 100% of USONYX, a wholly-owned subsidiary of Japanese company CLARA ONLINE, a hosting provider operating in China, Singapore & Taiwan. This acquisition should help EXABYTES to raise its overseas business by 20%, aiming for revenue of USD 9.3 M (MYR 30 M) in FY2015.
“Moving forward, we are eyeing more acquisitions or partnerships in the region to accelerate our market share growth,” said CEO & founder Chan Kee Siak, adding that EXABYTES plans to penetrate the Indonesian market in the Q4 2014.

EXABYTES
Revenue (FY2014 ended March 31): USD 6.6 (MYR 21 M)

August 7th / Digital News Asia

LUXURY & LIFESTYLE

Luxury

UNITED ENGINEERS (Singapore) sells car dealership WEARNES (Singapore) for USD 364 M

Singapore-listed real estate & engineering company UNITED ENGINEERS will sell its high-end car dealership WEARNES to Singaporean company STARCHASE MOTORSPORTS for SGD 455 M (USD 364 M).
STARCHASE sells luxury cars such as Bentley in Malaysia & Porsche in China, while WEARNES will add brands such as Jaguar & Land Rover. WEARNES will also give access to Thailand where STARCHASE has little presence.

August 26th / WSJ


Jewellery & Timepieces

SWATCH GROUP to launch smart watch next year

Swiss watchmaker SWATCH GROUP has announced that it will come out with a smart watch next year, in an effort to capitalize on a new market that analysts say could be worth up to USD 93 bn.
The announcement comes as SWATCH shares have been down nearly 15% this year on the sentiment that APPLE INC could unveil a smart watch of its own, tentatively referred to as the iWatch.

SWATCH GROUP
Revenue: USD 4.1 bn
EV/EBITDA: 12.3x
EV/Sales: 3.0x

August 7th / Reuters


Food Service

BURGER KING to buy Canada’s TIM HORTONS for USD 11.4 Bn

BURGER KING has announced its plans to buy Canadian Coffee and Donught Chain TIM HORTONS for USD 11.5 Bn in a cash-and-stock deal that would create the world’s largest fast-food restaurant group.
With about USD 23 Bn in combined annual sales, more than 18,000 restaurants in 100 countries and two strong brands, the new merged entity would have and an extensive global footprint and high growth potential.
Warren Buffet’s BERKSHIRE HATHAWAY has committed USD 3 Bn of preferred equity to finance the deal but it will not have any management role.


Multiples of the transaction:
– EV/Sales: 3.9x (TTM)
– EV/EBITDA: 15.8x (TTM)

July 12th / WSJ, FT, Finance in Asia


Wine & Spirit

TPG (US) & KKR (US) both bid for TREASURY WINES (Australia)

Two global PE firms TPG & KKR are facing off in a battle for Australian TREASURY WINE ESTATES LTD after TPG has matched a USD 3.1 Bn offer from KKR & RHONE GROUP. Both bids value the target at 23.6x expected earnings for the year ending June 2015, an unusual high valuation for PE.

August 11th / Reuters

JIUXIAN.COM (CN) raised USD 49 M in Series F led by CHINA DEVELOPMENT BANK CAPITAL CORPORATION LTD

Beijing-based alcoholic beverage e-commerce company JIUXIAN.COM raised RMB 35 Bn (USD 49 M) in Series F led by CDB CAPITAL.
Besides JIUXIAN.COM says it has received USD 113.7 M bank credit from different Chinese banks.
JIUXIAN.COM received around USD 80 M from the previous series of financing.

August 22th / CHINA MONEY NETWORK