China’s Heilan Home to acquire stake in Lunar-owned Yeehoo

Heilan will buy the entire holdings of two onshore investment entities controlled by Yeehoo CEO Feng Gao, who was hired by Lunar to manage the business in 2013, a filing said. The remaining interest will be held by Lunar through its Hong Kong-based investment platform Best Kids International – which is the largest shareholder with 46% – and an onshore entity with a 10% stake.

A separate registration document indicated that Lunar transferred a 55% stake of Yeehoo last year from Best Kids to three domestic entities – including the two controlled by Gao – paving the way for the GP to exit the business to Chinese trade buyers.

Lunar, which specializes in mid-market consumer sector control deals, acquired a 65% stake in Yeehoo through a $100 million management buyout in 2012. An upscale brand in China, Yeehoo designs and distributes baby products for children ranging from newborn to six years old. 

The company generated RMB722.3 million in revenue last year, with a net profit of RMB36.3 million. As of August this year, it recorded RMB372.4 million in revenue and RMB6.8 million in net profit.

The babywear industry is expected to grow rapidly in China driven by the new “second child” policy and strong demand for high-end products, Heilan Home said in the filing. The investment is a strategic move to facilitate the company's expansion in this market.

Founded in 1997, Heilan Home manufactures and sells casual clothing and business wear under four brands: Heilan Home, Eichitoo, Hieiika, and Sancanal. Its revenue grew to RMB17 billion last year from RMB16 billion in 2015, while over the same period net profit increased from RMB3 billion to RMB3.1 billion.

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• Topics
• Greater China
• Trade sale
• Consumer
• China
• Lunar Capital Management
• Trade sale