KKR boosts Masan Consumer stake with $200m investment

KKR increased its equity stake through the purchase of a combination of primary and secondary shares. Masan will use the proceeds to support its consumer sector expansion plans, including lateral acquisitions, and is particularly keen to build on its presence in the instant noodles and instant coffee segments.

"Our investment in Masan Consumer is the largest PE investment in Vietnam and the largest investment by KKR in Southeast Asia [outside of Singapore]," said Ming Lu, head of Southeast Asia for KKR. "This demonstrates our strong belief in the Vietnam consumption story."

He added that in the two years since KKR first invested in the company, it has become more convinced by the potential for consumer growth in Vietnam, Masan Group as the best partner to tap this growth, and Masan Consumer's viability as platform for accessing the sector.

The private equity firm first identified Masan as a potential target several years ago while conducting top-down analysis of Vietnam's consumer space, but at the time felt the company was too small. After 2-3 years of rapid growth, that assessment changed.

Masan was set up in 2000 as a subsidiary of Ho Chi Minh-listed Masan Group. It manufactures and distributes food and beverage products, including fish sauce, soya sauce, chili sauce, instant noodles, instant coffee and cereals.

With some of Vietnam's leading consumer brands in its portfolio, the company has become the market leader in sauces and instant coffee, and ranks number two for instant noodles despite entering the segment less than a year ago.

The company previously received private equity funding from Mekong Capital and VinaCapital. The former exited its holding in November 2010, securing a gross return multiple of 2x and a gross IRR of 61% on shares sold over an 18-month period.

Masan's sales were expected to reach nearly $500 million in 2012, up from $336 million last year. In 2007, sales stood at just $31 million. Net profit came to $107 million in 2011.

Parent company Masan Group, which holds assets across the food and beverage, financial services and natural resources sectors, announced plans for a $1.5 billion GDR issue in Singapore, scheduled for 2012 or early 2013, but has yet to take it any further.

Madhur Maini, CEO of Masan Group, indicated that the company is currently focused on business growth. He noted that the Vietnam consumer story "has long legs," with household incomes projected to double by 2020.

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• Topics
• Expansion
• Southeast Asia
• Consumer
• Vietnam
• Southeast Asia
• Consumer
• KKR
• Growth capital