KKR invests $74m in Indonesian bread producer

The private equity firm bought approximately 790 million shares in the Jakarta-listed company for IDR1,275 apiece, according to a statement. The stock closed at IDR1,330 on October 26.  

Established in 1995, Indosari is a leading player in Indonesia’s mass-produced bread segment. It has 10 factories with a total production capacity of more than four million pieces of bread per day and distributes products through a network of 67,000 sales points. KKR sees the investment as a means of tapping into increasing demand among local consumers for high-quality products.

As of year-end 2016, Salim Group’s Indoritel Makmur Internasional – also a backer of minimarket operator Indomaret and the Indonesia KFC franchise – owned 31.5% of Indosari. The Yap family’s Bonlight Investments had 25.1% while the Morita family’s Pasco Shikishima owned 8.5%.

In 2016, Indosari entered into a joint venture, known as Sarimonde Foods Corporation, with Monde Nissin Corporation to manufacture bread in the Philippines. The business, in which Indosari holds a 55% interest, is expected to commence operations next year.

“KKR is focused on partnering with strong Indonesian entrepreneurs to provide assistance and capital to homegrown, local champions like Indosari. We believe that, with its focus on delivering premium, high-quality products to consumers, Indosari is well-positioned to capture opportunities across Indonesia and overseas,” said Jaka Prasetya, a managing director at KKR.

Indosari posted sales of IDR2.52 trillion ($185 million) in 2016, up from IDR2.17 trillion the previous year. Net profit increased from IDR270.5 billion to IDR279.9 billion over the same period.

This is KKR’s third investment in Indonesia in the space of 18 months. The private equity firm acquired a 10.4% stake in poultry producer Japfa Comfeed – a listed subsidiary of Singapore-based Japfa – for $81.2 million and then participated in a $550 million round for ride-hailing and delivery platform Go-Jek.

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• Topics
• Southeast Asia
• PIPEs
• Consumer
• Indonesia
• KKR
• Growth capital