Hony, CITIC Goldstone support Bright Food's Tnuva deal

Bright Dairy will sell approximately 559 million shares at RMB16.10 apiece. The stock, which had been suspended for three months ahead of the announcement, was up 10% at around RMB21.50 as of early afternoon trading on June 9.

The other investors are domestic property developer Shanghai Yimin Commercial Group, an investment unit of carmaker Shanghai Automotive Industry Corp. (SAIC), Hong Kong-listed Chinese property developer Guosheng Group, and a fund controlled by government-owned Shanghai Pudong Science & Technology Investment, according to a filing.

Hony will acquire 186.3 million shares in Bright Dairy for a total consideration of RMB2.99 billion, while CITIC Goldstone will pay RMB3.49 billion for 217.4 million shares. They will hold stakes in the company of 10.4% and 12.1%, respectively. The investor group as a whole will own 31.24% of Bright Dairy. Bright Food, which currently holds a 54.35% stake, will be diluted to 37.37% following the placement.

Last May, Bright Food agreed to pay $1 billion in cash and assume some debt in return for Apax Partners' 56% stake in Tnuva. It is the dominant food company in Israel, with revenues of $2 billion in 2013 and leading positions in dairy as well as a range of other fresh and frozen food products. Apax completed its investment in 2008 at an enterprise valuation of $1.4 billion, with Mivtach Shamir, a local investment firm, buying 21%. The rest of the company is owned by local farmers.

Of the RMB9 billion raised through the placement, RMB6.87 billion will be used to acquire a 100% interest in Bright Food Singapore Investment. This vehicle holds a 76.7% interest in Tnuva. The rest of the proceeds will go towards working capital.

When the time came to exit Tnuva, Apax prepared for an IPO in Tel Aviv while considering trade sale options. The introduction to Bright Food came via Israel-based employee at accounting firm BDO who was aware of the Chinese company's keenness not only to expand but also to gain access to new technologies and expertise.

It is the third time a private equity firm has exited an asset to Bright Food, following the acquisition of majority stakes in Australia's Manassen Foods and UK-based Weetabix from CHAMP Private Equity and Lion Capital, respectively.

Goldstone was incorporated as a wholly-owned subsidiary of CITIC Securities in 2007 with a remit to make direct investments on behalf of the group. In recent months it has joined a take-private bid for US-listed OmniVision Technologies, supported a RMB1.75 billion mining deal by aquatics producer Hubei Wuchangyu, and acquired a portfolio of retail outlets from Suning Commerce Group for RMB4 billion.

Hony currently manages five US dollar-denominated and two renminbi funds and has more than RMB46 billion in assets under management. Its best-known cross-border deal is the acquisition of UK-based Pizza Express last year for about GBP880 million ($1.5 billion).

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Consumer
• Greater China
• MENA
• PIPEs
• PIPE
• Consumer
• China
• M&A
• Outbound investment
• Hony Capital
• Goldstone Investment
• MENA