Mekong exits Vietnam's Asia Chemicals for $8.9m

The private equity firm initially invested $3.8 million in the company in 2011. ACC was the tenth and final investment for the firm’s Mekong Enterprise Fund II (MEF II). It was also the final divestment from the vehicle, giving MEF II a net return multiple of 4.5x and a net IRR of 22.5%.

Following confirmation of the ACC exit, Mekong described MEF II as one of the most successful funds in the Asian private equity industry. The fund was launched in 2006 with $50 million and marked a strategic shift for the GP that included a tighter deal targeting approach.

“MEF II represented a critical turning point in Mekong Capital’s history as it was the fund in which we started to focus on consumer-driven investments, and also comprised the initial companies that applied the Vision Driven Investing framework,” Chris Freund, a partner at Mekong, said in a statement. Mekong’s Vision Driven Investing policy is aimed at strengthening networks with former portfolio companies.

Notable investments from MEF II include restaurant chain operator Golden Gate, which achieved a 9x return, and school operator Vietnam Australia International School, which achieved a 4.5x return after it was acquired by TPG Capital last year. Earlier this year, the fund completed its exit from Mobile World, securing a 57x gross return multiple and a 61% gross IRR.

ACC was founded in 2001 with a focus on the food industry and has since pivoted to operate across a range of specialty chemical categories, including paint, textiles, cosmetics, and pharmaceuticals. Mekong claims ACC achieved a cumulative annual net profit growth rate of 18% over its holding period. During this period, the company opened a 3,000-square-meter warehouse in Ho Chi Minh City.

Mekong claims to have completed 33 private equity investments in Vietnam since 2001, of which 25 have been fully exited. Its latest vehicle, MEF III, closed at $112 million in 2016 and focuses exclusively on consumer-related businesses, including retail, restaurants, and consumer products and service businesses. MEF III has backed seven companies to date, including mattress retailer Vua Nem.

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• Topics
• Southeast Asia
• Industrials
• Exits
• Vietnam
• Mekong Capital
• Chemicals