China’s JD.com, Cosmo Lady launch $159m M&A fund
Chinese online retailer JD.com has formed an M&A fund with Hong Kong-listed clothing producer and retailer Cosmo Lady. The target size is RMB1 billion ($159 million).
Cosmo Lady and JD.com will make initial commitments of RMB250 million and RMB100 million, respectively, to the vehicle, according to a filing. Further contributions will come from third parties.
The fund will acquire companies all along the "intimate wear" supply chain, from upstream production to downstream distribution. Cosmo Lady claims to be Chinese market leader in this segment, producing a range of underwear and nightwear. The fund is intended to drive domestic consolidation and overseas expansion.
JD.com will be part of the fund management team, leveraging its resources and corporate investment experience to help Cosmo Lady identify targets and execute transactions.
Founded in 1998, Cosmo Lady generated RMB4.5 billion in revenue in 2016, down from RMB5 billion the previous year. Over the same period, net profit dropped 55.7% to RMB305 million.
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