China's Focus Media commits $150m to four investment funds
Focus Media, the Chinese outdoor advertising business taken private by a PE consortium and re-listed in Shenzhen last year through a reverse merger, is supporting four investment funds seeking to raise a combined RMB2 billion ($300 million).
The partner GPs are: Boiling Point Asset Management, which is managed by Chuan Thor of Highland Capital Partners; Shenzhen Fortune Venture Capital; a healthcare-focused unit of China Universal Asset Management; and the investment division of Zero2IPO Group.
Each fund has a target of RMB500 million and Focus Media will contribute no more than 50% of the final corpus. In each case, the fund life is seven years with the option of two one-year extensions, according to a filing.
This is not the first time Focus Media has partnered with a private equity firm to launch a fund. Earlier this year, the company said it would team up with FountainVest Partners to raise a $400 million vehicle that will target sport-related businesses in China and overseas. Focus Media agreed to cover up to 50% of the corpus.
FountainVest was part of the consortium that privatized then US-listed Focus Media in 2012 at a valuation of $3.5 billion. It went public in Shenzhen towards the end of last year at a valuation of RMB45.7 billion. Ahead of the reverse merger, group of Focus Media's offshore shareholders made partial exits to 36 domestic institutional investors at a valuation of RMB45 billion.
Founded in 2003, Focus Media operates an advertising network in various urban locations, using audiovisual television displays that are placed primarily in high-traffic areas. In 2015, the company posted revenue of RMB8.6 billion, an increase of 15% from RMB7.5 billion the previous year. Net income came to RMB3.4 billion, compared to RMB2.4 billion in 2014.
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