KKR exits Vietnam's Masan Consumer with over 2x return

The private equity firm first paid $159 million for a 10% stake in MCC and then committed a further $200 million two years later. It ended up with an approximately 18% interest in the business, according to a source familiar with the situation.

KKR received one dividend payment from the business and made its exit over the course of three transactions, starting in July of last year, when half the holding was sold back to the parent, Masan Group. The most recent transaction was related to the broader agreement between Masan Group and Thailand's Singha to create a combined food and beverage platform.

The first phase of funding in this partnership saw Singha pay $50 million for a 33.3% interest in Masan Brewery and $600 million for 14.3% of Masan Consumer Holdings, according to a disclosure. That $600 million injection enabled Masan Consumer Holdings to purchase additional shares in MCC, taking its direct ownership of the company from 77.8% to 96.7%. This process facilitated the purchase of the remainder of KKR's stake. The size of the deal was not disclosed.

The second and final phase of the $1.1 billion transaction beetween Singha and Masan Group will see Singha increase its ownership of Masan Consumer Holdings to 25%, for an additional commitment of $450 million.

Announcing their plans in December, Masan Group and Singha said their platform would cover nearly 250 million consumers across Vietnam, Thailand, Myanmar, Cambodia and Laos. It will bring together Masan Group's seasoning, convenience foods, and coffee and beverages businesses and Singha's established presence in beer and non-alcoholic beverages and its growing food operation.

Masan Group, which has interests in resources and financial services as well as fast-moving consumer goods, posted revenue of VND16.3 trillion ($733 million) in 2014, up from VND12.1 trillion the previous year. Net profit rose from VND1.31 trillion to VND2.04 trillion. The company does not specify how much of this is attributable to MCC.

When KKR made its second investment in MCC, it was said that sales were expected to reach nearly $500 million in 2012, up from $336 million the previous year. In 2007, sales stood at just $31 million. Early backers of the company included VinaCapital and Mekong Capital, which invested in 2007 and 2009, respectively. Mekong exited with a 2x gross multiple in 2010.

MCC 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.

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• Topics
• Southeast Asia
• Consumer
• Buyback
• Southeast Asia
• Vietnam
• Consumer
• Exit
• Buyback
• KKR