Chinese consortium to invest in Australia’s Buderim Group
Sino-Australian PE firm Wattle Hill RHC Funds has partnered with Chinese snack producer QiaQia Food to acquire a stake in Buderim Group, Australia’s largest ginger producer, for approximately A$26.1 million ($20 million).
Buderim will raise about A$11.6 million from Asia Mark Development (AMD), an affiliate of Shenzhen-listed QiaQia, via a placement and underwritten rights issue, according to a filing. In addition, it will issue A$15 million worth of convertible notes to Wattle Hill and AMD. The notes have an annual coupon of 4.5% and a tenure of three years. If fully converted, they could give the investors a 48% stake in the business.
Headquartered in Heifei province, QiaQia is one of China's largest modern snack producers, specializing in roasted seeds and tree nuts. Its products are sold in more than 900,000 retail outlets nationwide, and also exported to Southeast Asia, Europe and the US. Revenue came to RMB3.31 billion ($496 million) last year. AMD and QiaQia have entered into joint ventures and co-investments in a number of snack processing facilities in China.
Wattle Hill was founded by Albert Tse, previously an executive at Macquarie Group and the son-in-law of Kevin Rudd, the former Australian prime minister. Based in Sydney, Hong Kong and Beijing, Wattle Hill manages a fund that invests in Australian and New Zealand companies keen to expand in China. The fund has reached a first close with the backing from European and Chinese insurance companies, as well as China's "largest direct e-commerce player," the firm said on its website.
Founded in 1941, Buderim produces ginger and macadamia-based products under five brands including Buderim Ginger, MacFarms, Fresh from Hawaii, Agrimac and Frespac. It has ginger factories in Australia and in Fiji, as well as macadamia farms and factories in Australia and Hawaii. The group's revenue increased 11% year-on-year to A$78 million in 2015. However, it record a net loss of A$6.6 million compared to a profit of A$290,000 in 2014.
The new capital injection will be used to pay down Buderim's debt, increase distribution to export markets including China, and improve in-house manufacturing capabilities.
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