EmergeVest secures 2x return on first exit

The investment has generated a more than 2x multiple and an IRR in excess of 25%. EmergeVest committed $20 million to JDU in May 2014 with a view to helping the company go public. Part of the proceeds of that transaction were used to buy out another private equity shareholder. It provided additional capital in 2015.

Headquartered in Changzhou, Jiangsu province, JDU has 25 manufacturing facilities across Asia and Africa, producing apparel for leading international brands and retailers, such as Levi Strauss, Gap, Fast Retailing, Primark, and C&A. The merger with Roo Hsing will create a market-leading denim manufacturer with annual revenue of more than $500 million.

Roo Hsing generated NT$2.33 billion ($76.8 million) in revenue last year, up from NT$1.87 billion in 2015. Its net loss narrowed to NT$275 million compared to NT$469 million the previous year.

During the holding period, EmergeVest optimized JDU’s balance sheet, financed expansion into new markets and product categories, and managed the merger with Roo Hsing. “We are delighted to have helped JDU management make such significant progress in growing the business. We wish the enlarged company well for the future,” said Roger Moh, a managing director at the PE firm.

Following the spin-out from HSBC, EmergeVest raised capital for a specific set of deals it wanted to complete over a six-month period, one of which was JDU. The GP pursued two themes: Asia special situations and UK control deals. As of early 2015, it had completed five deals with around $100 million committed and had a further $100 million available.

EmergeVest was advised on the JDU transaction by Ropes & Gray.

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• Topics
• Greater China
• Trade sale
• Industrials
• China
• manufacturing
• EmergeVest