Sequoia-backs $1b take-private bid for China's Jumei

Leo Chen, Jumei's chairman and CEO, his co-founder Yusen Dai, and Sequoia are willing to pay $7.00 in cash for all outstanding American Depository Shares (ADS), according to a regulatory filing. This represents a 19.8% premium to the February 16 close. Jumei's stock closed up 8.22% at $6.32 on February 17.

The buyer group controls 54.4% of the total shares. As of February 2015, Chen and Dai held 35.1% and 5.4%, respectively, but due to the due-class share structure, had 87.2% of the voting power between them. Sequoia owned a 16.1% interest and a proportionally smaller voting stake.

Other investors include in Jumei include K2 Partners, a private equity firm co-founded by Keyi Chen and China Renaissance Partners in 2010, which had 7.5% and angel investor Xiaoping Xu with 7.7%.

Sequoia invested $4 million in the company through promissory notes in November 2010 and February 2011. These notes were fully discharged on completion of Jumei's Series A round in April 2011, which saw Sequoia, K2 and other investors commit $7.2 million. A Series B round came in November 2011. Jumei went public in May 2014, raising $245.1 million.

The company sells beauty products through an online shopping mall, curated sales - selecting and recommending a collection of branded beauty products that are available for set periods of time - and deep-discount, limited availability flash sales. It works with around 2,400 suppliers and third-party merchants and had approximately 13.3 million active customers in 2014.

Revenue came to $632.9 million in 2014, up from $482.9 million in 2013, while net income rose from $25 million to $65.9 million.

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• Topics
• Greater China
• Buyouts
• Technology
• Consumer
• Sequoia Capital
• buyout
• China
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• Consumer