
Navis sells duck genetics business to Chinese strategic investors
Navis Capital Partners has sold Cherry Valley Group (CVF), a duck genetics supplier and a breeder of Peking ducks, to Beijing Capital Agribusiness Group (Sunlon) and CITIC Agri Fund Management for an undisclosed sum.
Navis and Rabo Capital – now known as Nordian Capital Partners following its spin-out from Rabobank – bought CVF in 2010. Alongside Duck To Holdings, a Europe-based producer of deep-frozen Peking Duck, it was one of two bolt-on acquisitions for Thailand-based duck processor Bangkok Ranch, which the private equity firms had acquired in 2007.
Navis and Nordian sold Bangkok Ranch and Duck To to a consortium led by the founders of the two companies in 2013. The deal valued the combined assets at THB5.7 billion ($188 million) and generated a 1.8-1.9x return, including dividends paid during ownership. CVF was not included in this transaction; Navis and Nordian were left with a 98% stake, with Navis holding the controlling interest.
Founded in 1959, CVF has two core divisions: a UK-based processing business that produces duck genetic stock, and a livestock division in the UK, Germany, and China. It claims to be the operate the oldest duck genetic selection and breeding program in the world.
Navis said in a statement that it has worked with management to secure CVF’s dominant market share, both globally and in China, which is the largest individual market. Operational improvement efforts included investment in new technologies, additional breeding facilities, and the recruitment and promotion of key senior management team members.
“Cherry Valley is an outstanding, cutting edge genetics business with an industry leading position. The new owners are inheriting a strong management team and an excellent platform to grow, particularly in China and Southeast Asia,” said David Ireland, a senior partner with Navis.
Sunlon is a food conglomerate, created in 2009 when the Beijing government consolidated assets stretching from livestock to an interest in Starbucks' local operation. It has total assets of RMB66 billion ($9.9 billion) and employs 40,000 people across 64 state-owned enterprises, 31 joint ventures, and four overseas subsidiaries. In 2013, Affinity Equity Partners backed the company’s dairy farming operation.
CITIC Agri Fund Management was formed last year by CITIC Agriculture, Yuan Longping High-tech Agriculture – in which CITIC Group is the controlling shareholder – and two listed agricultural companies. Earlier this year, it paid $1.1 billion for a string of Brazil-based seed processing plants and seed research centers owned by Dow Chemical.
Navis manages approximately $5 billion and has completed more than 70 control transactions across Asia since 1998. Bangkok Ranch is unusual in that the private equity firm has invested in it twice. The company was on the brink of insolvency when Navis acquired a majority stake in 1999. It generated a near 10x multiple on selling the business to a group of investors including Rabobank several years later. Navis then returned for a second helping in 2007, supported by Rabo Capital.
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