Baring Asia buys 40% stake in Bright Food-controlled Weetabix

Bright Food bought its controlling interest in Weetabix from Lion Capital in 2012 at an enterprise valuation of approximately GBP1.2 billion (then $1.9 billion). Lion retained 40% and at the time it was suggested that the private equity firm could fully exit the company in 2-3 years. In April it sold its remaining shares to Bright Food, which has in turn sold them on to Baring Asia.

Lion took Weetabix private in 2004 in a deal worth GBP642 million. It was expected to make a near 5x return on fully exiting the investment, having received several dividend payments.

Baring Asia is investing at an enterprise valuation of GBP1.29 billion ($2 billion), according to a source familiar with the situation. Jean Eric Salata, the firm's founder and CEO, said in a statement that Weetabix is "well positioned to take advantage of the strong consumer demand in China for high-quality and nutritious food products."

Founded in 1932, Weetabix is a leading cereal manufacturer in the UK under its eponymous brand. The company, which also owns the Alpen, Ready-brek, Weetos, Oatibix and Alpen cereal bars, exports to 87 countries worldwide, including China.

Lion claims to have invested in brands and product innovation during its ownership period, launching several new products and extensions such as Weetabix Crispy Minis, Oatibix, Oatiflakes and Alpen Light Bars, Oaty bars and On The Go Breakfast Drink. This, combined with operating improvements, contributed to improved financial performance. Sales exceeded GBP490 million in 2014.

Yongjie Lü, chairman of Bright Food Group, said he expected to leverage Baring Asia's experience in the food and beverage sector - previous investments in the space include confectionary company Hsu Fu Chi, which was bought by Nestle for $1.7 billion in 2011 - and in executing cross-border growth strategies.

Bright Food is one of China's food companies, with operating income of more than RMB120 billion ($18.8 billion) in 2014 and assets all along the food supply chain from agriculture through processing and distribution.

The company is keen to invest in international brands and technologies that can contribute to its business in China. Previous overseas acquisitions include Australia's Manassen Foods from CHAMP Private Equity and Israel-based Tnuva from Apax Partners. Financing the latter deal saw Hony Capital and CITIC Goldstone take a significant minority stake in Bright Food's Shanghai-listed subsidiary Bright Dairy.

Baring Asia has been investing in the region since 1997 and has more than $9 billion in committed capital. The firm closed its sixth fund in February at the hard cap of $3.98 billion.

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• Topics
• Greater China
• Europe
• Consumer
• Expansion
• Exits
• China
• Baring Private Equity Asia
• Lion Capital
• Consumer
• Growth capital
• Exit
• Europe