Unitas backs Chinese casual dining chain Babela’s

Unitas is acquiring stakes in the company from three minority investors and will work in partnership with Xingwei Chen, the founder of Babela's Group, who retains his interest in the business. The exiting investors reportedly include The Carlyle Group, which invested in Babela's Group via Carlyle Asia Growth Partners III in 2007.

Jay Lee, a Unitas partner who was formerly a senior executive at Yum! Brands, will support the company's management team. This will involve investing further amounts to use Babela's as a platform for acquisitions of other restaurant brands in China.

"We are strong believers in the growth potential of the chained restaurant space in China and have the unique capability to directly improve and grow brands with our in-house operating capabilities. We've been searching for the right company to use as a platform for further growth in this space and have found the right company in Babela's Group and the right partner in Xingwei Chen," said Eugene Suh, partner and COO of Unitas.

The private equity firm, formerly known as CCMP Capital Asia, is currently investing out of its $1.2 billion Asia Opportunity Fund III and has more than $4 billion in assets under management. It focuses exclusively on the industrial manufacturing and consumer-retail sectors, and claims to have been the first Asia-only firm to employ a dedicated operations-focused executive.

Previous investments in the consumer-retail space include South Korean confectionary company Haitai Confectionary, convenience store chain Buy The Way, also from South Korea, and Australia and New Zealand-based auto parts distributor Repco.

China's food service industry is estimated to be worth $377 billion and has seen average annual growth of 12% in the past five years, primarily spurred by rising disposable incomes, changing lifestyles and urbanization. Concerns about food safety, which has seen casual diners flock to established brands, are also an issue.

The sector is popular among private equity firms seeking to leverage consumer growth in China. Last year, Apax Partners bought buffet-style restaurant chain Golden Jaguar while MUS Roosevelt acquired pizza buffet chain Origus.

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• Topics
• Greater China
• Consumer
• Expansion
• Unitas Capital
• China
• Growth capital
• Consumer
• The Carlyle Group