Hopu supports $1.5b Noble Agri deal, reaches first close on Fund II

The investment follows the private equity firm's first close of $1.1 billion on Hopu Master Fund II, which is said to be targeting at least $2 billion in total. The fund focuses on the consumer, natural resources and financial services sectors.

COFCO has agreed to pay an initial $1.5 billion for a 51% stake in Noble Agri from Noble Group. The assets will then be spun out into a new joint venture, in which Noble Group will retain a 49% interest. COFCO owns two thirds of the vehicle through which the acquisition is being made, with the Hopu consortium holding the balance.

Noble Agri had equity of $2.8 billion and net debt of $2.5 billion as of year-end 2013. The transaction values the equity portion at 1.15x book value for 2014.

Frank Ning, chairman of COFCO, said in a statement that the joint venture would bring together Noble Agri's supply chain management system and origination capabilities and COFCO's logistics, processing and distribution network in China.

Ning will become chairman of Noble Agri, with Richard Youngman, founder and chairman of Noble Group, serving as deputy chairman.

Founded in 1998, Noble Agri's business is split into three operating segments: grains and oilseeds, covering the origination, processing and distribution of corn, wheat, soybean and vegetable oil; trading of soft commodities such as cocoa, cotton, coffee and sugar; and the production of raw and processed sugar and ethanol.

Noble Group's agricultural division generated $15.5 billion revenue last year, accounting for about 16% of total revenue. The company is 15%-owned by China Investment Corporation. COFCO is China's largest provider of agricultural product and diversified food services, with revenues of $34 billion in 2012.

Hopu was set up in 2007 by Fang Fenglei and Richard Ong, now of RRJ Management, and they raised a debut fund of $2.5 billion. The firm made a string of high-profile investments but disbanded in late 2010 amid reports that the two principals could not get along.

The COFCO statement describes Hopu as having strong relationships with sovereign wealth funds and institutional investors in Asia Pacific, the Americas, Europe and the Middle East. It is also said to have considerable state-owned enterprise backing in China.

In February, the private equity firm participated in $2.5 billion investment in Global Logistic Properties (GLP), a Singapore-listed warehouse operator with interests in China, Japan and Brazil. Other consortium members included Bank of China's investment unit, an unnamed Chinese insurance company and other state-owned companies and institutional investors.

Last November, Hopu partnered with Temasek Holdings and three other investors to buy a 13.25% stake in Yashili International from China Mengniu Dairy for HK$1.6 billion ($213 million). The PE firm invested in Mengniu itself in 2009, buying a 20% stake alongside COFCO Group for HK$6.12 billion.

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• Topics
• Buyout
• Greater China
• Industrials
• Fundraising
• buyout
• Fundraising
• Commodities
• Agriculture
• Hopu Investment Management
• China