Hony commits capital to its Hong Kong-listed restaurant platform

The private equity firm subscribed to bonds that will convert into approximately 661 million shares at HK$1.18 apiece, according to a filing. The capital comes from Hony Capital Fund VIII, which closed at $2.7 billion in 2016.

Best Food was formed through the HK$1.5 billion acquisition of an existing listed company, Lee & Man Handbags. Towards the end of last year, Hony finalized the disposal of the last remaining handbag manufacturing assets. In 2018, the food and beverage portfolio generated HK$470.2 million in revenue, with a further HK$383.9 million from the handbag business.

Best Food’s two wholly-owned assets are HHG, a Beijing-based fast food chain specializing in rice meals, and Xinladao Fish Hotpot, which had 143 stores and 95 stores, respectively, as of June 2019. The company also has interests in eight joint-stock brands: Yujian Xiaomian, West Master, Sexy Salad, Yuepin, Dafulan, Clay Pot King, Seesaw and Foook.

A management platform is being assembled to support the development of these brands, focusing on franchise expansion, supply chains, training and human resources, and digitization. There have been moves to centralize franchising operations and supply chain management. For example, HHG is in negotiations with Xinladao to share a factory, which would enhance capacity utilization and reduce production costs. Meanwhile, Best Food University was set up as a centralized training facility.

Hony has taken a similar platform-based approach in the healthcare sector, with a view to consolidating medical resources through M&A. Hospital Corporation of China (HCC) was seeded with two Shanghai-based assets and then listed in Hong Kong in 2017. Since then, the private equity firm – which remains HCC’s majority shareholder – has sold several hospitals from its funds to the platform.

HCC provides management and consultancy services to all its hospitals, with the fees accounting for nearly all its revenue.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Consumer
• PIPEs
• China
• Hony Capital