FountainVest backs LJ International’s privatization

The two investors have agreed to acquire all of the outstanding ordinary shares of the jeweler not currently owned by Yih at a proposed price of $2.00 per ordinary share, subject to conditions. The CEO currently owns, in the aggregate, approximately 11% of the company's outstanding ordinary shares.

The proposal represents a premium of 24.2% on LJ International's closing price on Friday. Shares closed at $1.84 on Wednesday, valuing the company at around $56 million. According to a statement, it is intended that the acquisition will be funded by equity capital from the pair, but they may explore potential debt financing as appropriate.

Founded in 1987 in Hong Kong, LJ International designs, brands, markets, retails and distributes jewelry through retail and wholesale channels. The company's retail revenue was $112.79 million last year, up 43% from 2010; wholesale revenue also reached $69.39 million in 2011, up 12% year-on-year.

Last April, FountainVest Partners also partnered with Spring Capital Asia to buy a 28.27% stake in Enzo Jewelry - a China-based subsidiary of LJ International - for more than $41 million.

The news follows another US-listed company - Focus Media - receiving a $3.5 billion offer from its chief executive and a group of private equity giants to take the company private. If the deal goes through, the leveraged buyout could be China's largest, and Focus Media could be the largest Chinese company to be delisted from a US stock exchange.

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• Topics
• Greater China
• Buyouts
• Consumer
• China
• buyout
• Consumer
• Fountainvest Partners