KKR supports privatization of Singapore-listed 800 Super

The private equity firm will back the proposed transaction through a combination of debt and structured equity financing primarily from its Private Credit Opportunities II fund, which closed last year at $2.2 billion. As part of the deal, KKR will subscribe to about 22.2 million convertible preference shares in 800 Super, which currently equates to about a 12.4% stake.

Lee Koh Yong, executive chairman at 800 Super, and several of his siblings currently control 77.6% of the company and are offering to acquire 100% via a KKR-backed entity at S$0.90 per share. This represents a 16% premium to the last closing price before a trading halt was requested on April 29. The stock was trading at S$0.89 as of late morning May 6.

“KKR’s primary goal in this region is to work with great entrepreneurs and the founding families of homegrown businesses,” Ashish Shastry, CEO of KKR Southeast Asia, said in a statement. “We are very flexible on the type of support we provide — in this case, the Lee family required a credit-oriented solution, but we are also working with family groups by making majority or minority equity investments.”

800 Super provides services in residential, commercial and industrial waste management, cleaning, conservancy, laundry processing, and horticultural work such as landscaping. Operations span the public and private sectors in Singapore. It is a portfolio company of Singapore-based private equity firm Venstar Capital, which acquired a 6.3% stake in 2011 for S$2 million.

Revenue for the 2018 financial year came in at S$151 million, down 3.7% from the prior year, with the company citing pressure to agree to more competitive contract pricing and upscaling costs related to new businesses, including Iwash Laundry, an industrial dry cleaning business that was acquired for about S$5 million. Net profit fell 46.7% to about S$9 million.

KKR Private Credit Opportunities II focuses on private corporate debt and mezzanine lending, financial assets, hard assets and structured credit. It is more than twice the size of its predecessor fund, KKR Mezzanine Partners I, which completed its investment period in March 2015 with $1 billion in capital commitments. As of year-end 2018, KKR’s global credit business had $65.6 billion in assets under management.

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• Topics
• Southeast Asia
• Industrials
• Support services
• Credit
• Singapore
• KKR
• Structured finance