CVC-backed Matahari launches $1.3b offering

A CVC subsidiary and Multipolar, a vehicle owned by the Riady family's Lippo Group, are offering 1.167 billion shares priced at IDR10,000-11,250 apiece. A group of investors including BlackRock, Fidelity, Schroders, Government of Singapore Investment Corporation, Temasek Holdings, Och- Ziff Capital Management and Azentus Capital Management has agreed to cover $435 million of the offering.

The pricing is equivalent to a price-to-earnings ratio of 25-28x 2013 forward EBITDA. It is being benchmarked against the likes of Robinsons and Alfamart, which both currently trade at 34x forward EBITDA.

CVC bought a 72.6% stake in early 2010 from Matahari Putra Prima, a company controlled by Lippo, at an enterprise valuation of $892 million. It remains Indonesia's largest ever PE deal. The transaction was structured as a joint venture, with Lippo Group spinning off its 98.15% holding in the company into vehicle that is 80%-owned by CVC. Only 1.8% of Matahari is currently publicly traded.

Multipolar also serves as the holding company for First Media, which owns LinkNet, Indonesia's second-largest fixed-line broadband and cable TV operator. CVC invested in the company in 2011.

Matahari has benefited from the emergence of Indonesia's middle class, which accounted for 55% of the population - or 131 million people - in 2011, up from 38% in 2003. McKinsey & Company expects an additional 90 million people to join the ranks of the "consuming class" by 2030, with spending in urban areas rising 7.7% per annum to $1.1 trillion.

Matahari posted a 66% year-on-year rise in net income to IDR771 billion ($80 million) in 2012. It is the country's fourth-largest retail brand by sales, after convenience store chains Alfamart and Indomaret, and French hypermarket chain Carrefour, with 116 outlets in 50 cities.

It first emerged that CVC was considering exit options late last year when CIMB, Morgan Stanley and UBS were appointed to run a sale process.

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• Topics
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• CVC Capital Partners