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Private equity firm invests about $150 million in GarudaFood
CVC buys Malaysia’s Munchy Group for about $250 million
CVC Capital Partners has invested in PT GarudaFood Putra Putri Jaya, Indonesia’s top snack-food maker, as the private equity firm deepens its exposure to fast-growing Southeast Asia, people with knowledge of the matter said.
CVC invested about $150 million in GarudaFood ahead of a planned initial public offering, according to the people, who asked not to be identified because the information is private. It has also completed the acquisition of Malaysian snack-food maker Munchy Group for about $250 million, one of the people said.
Foreign investors have been betting that economic growth in Southeast Asia will fuel demand for higher-end consumer products. The region’s economy grew 5.2 percent last year, up from 4.7 percent in 2016, according to the Asian Development Bank, and it’s forecast to grow at the same pace this year and next.
CVC was particularly attracted to the growth potential of GarudaFood’s branded products including peanuts, wafer sticks and crackers, said one of the people. GarudaFood is No. 1 in Indonesia’s market for savory snacks, according to Euromonitor International. The market is forecast to grow about 40 percent in the five years through 2022 to reach $2.4 billion, Euromonitor data show.
An official at CVC declined to comment. A spokeswoman for Munchy said she couldn’t immediately comment, while a representative for GarudaFood couldn’t immediately be reached for comment.
Bloomberg reported last year that GarudaFood, which also sells Leo brand potato chips and Gery chocolate biscuits, was exploring a potential domestic initial public offering.
CVC decided to buy Munchy in part because it saw potential in its already-strong export business, one of the people said. The company makes Munchy’s crackers, as well as biscuits and wafers sold under the Lexus, Oat Krunch and Muzic brands that are marketed in more than 50 countries, its website shows.
Munchy had 14 percent share of Malaysia’s $112 million sweet biscuit market in 2017, the second-biggest maker in the country, Euromonitor data show.
The CVC Asia IV fund has made five investments in the past 12 months, including deals for GarudaFood and Munchy, the person said. In December, CVC bought a stake in Riraku, a Japanese operator of relaxation-therapy centers, and a month later, it invested in Vietnam’s Asia Commercial Bank, its website shows. The fund also said last month it agreed to buy OANDA Global Corp., an online retail trading platform.
CVC was part of a consortium including Employees Provident Fund and Johor Corp. that bought QSR Brands (M) Holdings Sdn. in 2013. QSR Brands manages hundreds of KFC restaurants and Pizza Huts throughout Southeast Asia, its website shows.