Issue 23

PE firm Southern Capital offers to take over MY-based creamer business

Bursa-listed Can-One Bhd has received a letter of offer from Singapore-based private equity firm Southern Capital Group to acquire its wholly-owned dairy product manufacturing arm F&B Nutrition Sdn Bhd for up to 1 billion ringgit ($240 million), it said in a stock filing Monday evening. 

The conditional offer was made via a Southern Capital special purpose vehicle, Asia Dairy Creations Sdn Bhd, with an indicative price of between 800 million ringgit ($191.5 million) and 1 billion ringgit ($240 million). F&B Nutrition is an original equipment manufacturer of sweetened creamer and evaporated creamer. 

It said that over 70 per cent of its products are exported across the Middle East, Africa, ASEAN and South Asia. According to the stock filing, the offer shall remain open for acceptance from the date of the offer letter (dated June 3) until 5 pm today, after which it will automatically lapse. “The board will deliberate on the offer and decide on the next course of action, and an announcement on the same will be made in due course,” said Can-One, a local metal can manufacturer. 

Southern Capital held the final close of its fourth fund at $500 million early this year, after securing commitments from several US and Europe-based family offices, endowments and pension funds. 

Focusing on buyouts, Fund IV will continue to invest in Southeast Asia’s mid-market businesses with enterprise value between $20 million and $200 million. Besides Southern Capital, several regional PE firms are also on the road to fundraise, including Malaysia-headquartered Navis Capital, who is seeking to raise $1.75 billion for its eighth fund, also the largest in the region. 

The vehicle reached the first close in April and is expected to hold a final close by year-end. We had also reported that Singapore-based KV Asia Capital is looking to offload its Malaysian portfolio companies DXN Holdings and TF Value Mart to help with the fundraising activities of its second fund. The firm is looking to raise about $300 million for its second fund. 

Another Malaysia-based private equity firm, Creador, aims to hit the $550-million hard cap for its fourth fund in the coming months. One of the firm’s portfolio companies – Malaysian home improvement retailer Mr. D.I.Y. is looking to debut on Bursa Malaysia with a 1.5 billion ringgit ($360 million) IPO this November.


From – Deal Street Asia


Dubai’s PE firm Al Najah Education makes first investment in Malaysia

Dubai-based private equity firm Al Najah Education has made its first investment in Malaysia by acquiring a significant stake in Regent International Schools. 

The investment, made through Al Najah’s Southeast Asian subsidiary Horizon Education Asia Limited (HEAL), gives Al Najah access to Regent’s network of five campuses located in Klang, Puching, Sungei Petani, and Kuantan. 

Al Najah Education currently owns and operates 31 pre-schools and training centres in Singapore through HEAL, and four schools in the United Arab Emirates and Oman. Al Najah Education CEO Raza Khan said the investment aligns with the company’s efforts to complement its education portfolio in Singapore. 

“HEAL plans to continue investing and expanding through the entire Southeast Asian region, further growing the Al Najah Education portfolio on a global scale,” he added. “We envisage at least two additional schools to be launched in the next 24 months, spearheaded by the combined expertise of our own assets as well as those of HEAL,” said Regent International Schools CEO Nelson Renganathan. 

Al Najah Education operates a network of educational facilities across four verticals – pre-primary, primary, secondary and training institutes. It has experienced exponential growth throughout the years, starting from three educational assets in 2013 and expanding to 48 assets in 2018, catering to approximately 16,000 students across all its operating regions, through a buy-and-build strategy.

From – Deal Street Asia

Raimon Land, Mitsubishi Estate to jointly develop $277m office building

Thailand’s property developer Raimon Land has established a 60:40 joint venture with Japan’s Mitsubishi Estate to develop One City Centre with a total investment of 8.8 billion baht ($276.57 million), according to the company’s announcement on Tuesday. 

Of the total amount, it will spend 5.5 billion baht on construction and 3.3 billion baht on a 30-years land leasing contract. The project is expected to be completed in the fourth quarter of 2022 and will start generating revenue in early 2023. 

Raimon Land’s chief executive Lionel Lee said that when this project starts operation, the company’s revenue will surge by 30 per cent. “By the time that One City Centre is completed, there won’t be a lot of new supply in the market. We are confident that it will generate the revenue of 60 million baht per month in the first year and increase to 80 million baht per month in the following years,” he said. 

One City Centre will contain 61 floors with an estimated total rental area of 61,000 square meters, with about 92 per cent marked out as office space and 8 per cent as retail area. The building is to be constructed on a prominent land plot on Ploenchit Road covering a total of 6 rai and 28 square wah (9,712 square metres) of space. 

It will be directly connected to the Ploenchit BTS Station, and surrounded by a host of amenities including a leading shopping mall and five-star hotels. Raimon Land targets the revenue to reach 5 billion baht this year owing to The Loft projects in Asok and Silom. It plans to launch two projects worth 11 billion baht in the second half of this year. 

One is the joint venture project with Tokyo Tatemono Asia Pte Ltd on Sukhumvit Road, and the other is in Ratchathewi area.

From – Deal Street Asia

SG’s Osmanthus completes acquisition of 15% in Philippines’ One Network Bank

Osmanthus Investment Holdings, a unit of Singapore-based private equity firm Archipelago Capital Partners, has completed its acquisition of a 15-per cent stake in One Network Bank Inc (ONB), the rural banking arm of the Philippines’ largest lender BDO Unibank. 

BDO Unibank confirmed the completion of the deal in a disclosure to the Philippine Stock Exchange. The deal was first announced in October but financial details were not disclosed. “We inform the exchange that on May 16, 2019, BDO Unibank completed its transaction with Osmanthus for the acquisition of a 15-per cent equity stake in ONB,” the lender said in its disclosure. 

ONB became a BDO subsidiary in 2015 when the latter bought a controlling stake from the Consunji family for P6.67 billion ($127 million). This allowed BDO to broaden its market base. ONB provides deposit-taking services, salary loans and MSME loans in areas considered unbanked or underserved by banks. 

As of 31 December 2017, ONB remained the country’s largest rural bank in terms of assets. It has over 120 branches and more than 220 ATMs with access to BDO’s nationwide distribution network. BDO said, the transaction formalises the working relationship between ONB and Osmanthus. 

The Singapore firm has been collaborating with ONB since 2017 in developing the framework for its micro-SME (MSME) lending business, leading to the establishment of the initial pilot test sites. “The partnership with Osmanthus will further strengthen ONB’s strategic foothold in the microfinance business, and contribute to the government’s efforts at improving financial inclusion,” BDO said in its October disclosure. 

Osmanthus is unit of Singapore-based PE firm Archipelago Capital Partners Pte Ltd, a fund that invests in small to mid-market companies in Southeast Asia. It is managed by former McKinsey and banking professionals, led by CEO Jovasky Pang. BDO, ranked the largest bank in the Philippines in terms of total assets, loans, deposits, and trust funds under management as of June 30, 2018, sees net profit this year hitting a new high of P38.5 billion ($731 million), driven by a continued double-digit expansion in loan book, improved margins, and steady fee-based income. 

In January 2017, BDO completed the largest equity capital raising in the Philippines at P60 billion ($1.1 billion). The offer saw strong participation from the BDO’s domestic and international investors and was oversubscribed.

From – Deal Street Asia

Australia’s $46b Sunsuper seeks to sprint ahead in pension fund race

Sunsuper Pty Ltd., one of Australia’s 10 largest pension funds, is in a race to attract new customers and keep up with its competitors as the world’s fourth-biggest pool of retirement savings explodes in size. 

The A$66 billion ($46 billion) fund is boosting its marketing to financial planners to ensure it gets a share of the money flowing into the industry. 

That will be a key focus of whoever takes over from Scott Hartley, who announced last week he is stepping down as chief executive officer once a replacement is found, Chairman Andrew Fraser said in an interview. 

“The future of the Australian superannuation landscape is going to be defined by stronger retail competitive forces,” Fraser said. “Leaders who have experience in competing in those types of markets is something that I think is important.” 

The superannuation industry, which invests the mandatory retirement savings of Australians, stands at A$2.8 trillion and is forecast to hit A$5.4 trillion within a decade. 

Funds are under increased pressure to cut fees and boost returns, which is leading to consolidation. Since becoming CEO in late 2013, Hartley has almost tripled the size of Sunsuper, in part through mergers with Kinetic Super and AustSafe Super. The Brisbane-based pension fund was the nation’s second-best performer in the year ended March 31, returning 8.1%, according to superannuation researcher Lonsec Group. 

It’s becoming ever more important to grow in size to keep up with the biggest players, according to Fraser. AustralianSuper Pty., the nation’s biggest pension fund with more than A$155 billion under management, is on track to double in size over the next five years. 

That exponential growth is being helped by people shifting their retirement savings from bank-owned funds, whose reputation was sullied by a yearlong inquiry into financial industry misconduct. “The nature of superannuation is overwhelmingly a scale game,” said Fraser. 

The ability “to compete and to win customers and indeed to retain members, to build that scale, is going to be a feature that will continue.”

From – Deal Street Asia
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