The Abraaj Group has made its fourth investment in Southeast Asia’s food and beverage market, acquiring the Wine Connection Group for an undisclosed sum, according to a statement.
The firm took a majority stake in the business, which offers affordable wines from around the world across Southeast Asia, with 55 outlets in Singapore and Thailand. Wine Connection targets the region’s growing middle class focusing on offering affordable and quality western food and beverages.
Through its investment, Abraaj will draw on its experience in both the region and the industry to drive growth by increasing Wine Connection’s footprint in existing markets, as well as replicating its business model across new territories, both regionally in Southeast Asia and beyond.
“F&B is an active sector for us all over the world. Particularly in Southeast Asia, this is our fourth investment in this space, having exited three prior businesses very successfully with very strong returns north of 3x multiple,” Omar Lodhi, partner and head of Southeast Asia at Abraaj, told Private Equity International.
The firm made the investment from its second Southeast Asia fund, a $250 million vehicle launched when Abraaj and Aureos Capital, an emerging markets firm, merged in 2012.
The fund has made six investments and is “substantially” deployed, Lodhi said, with Abraaj expecting to launch a successor vehicle next year, although he would not provide more details.
The firm’s first Southeast Asia vehicle, from which Abraaj’s first three F&B acquisitions were made, is now about 90 percent realised, with 15 exits generating over 2.7x multiple on cash.
Srisant Chitvaranund, managing director of Abraaj, added in a statement, “The consumption-led growth across the region will provide us with a robust platform to expand Wine Connection into the next phase of its growth, leveraging operational efficiencies, increasing the number of stores in its current markets and targeting new countries both in the region and around the world.”