Baring Asia invests $135m in Chinese candy

Hong Kong-based Baring Private Equity Asia has acquired a 16.5 percent stake in Hsu Fu Chi, a Chinese confectionary group listed on the Singapore Exchange, for a consideration of $135 million.

Gordon Shaw, a managing director of Baring Asia, will be appointed to the board of the company from 1 November.

Baring was attracted to the company’s brand and market position, its extensive sales and distribution network and its management team, Kenneth Cheong, a managing director at Baring, said in a statement. “The company will continue to benefit from growth in per capita confectionary consumption in China, where the current penetration rate is still low relative to other countries,” he said.

Hsu Fu Chi: sweet deal

Hsu Fu Chi, established in 1992, has 107 sales offices and a sales team of more than 8,000 people who control more than 13,100 retail sales points. Its main production bases are located in Dongguan with an annual production capacity of 317,100 tonnes. The company sells its products under the “Hsu Fu Chi”, “DoDo”, “Chaobi” and “Mo Bao” brand names among others.

Last month, Baring Asia invested $42 million for a significant minority stake in PERA Global, a Chinese technology company. That transaction is the largest single private investment ever made in China’s software industry, the firm said in a statement.

Baring Asia is currently investing from Baring Asia Private Equity Fund IV, which closed on $1.52 billion in May 2008. The fund makes investments in companies with enterprise values of between $100 million and $500 million in sectors such as alternative energy, media, financial services, consumer and industrial sectors. The fund is primarily focused on investments in China, India, Japan, Singapore, Hong Kong and Taiwan.

The firm currently has $2.5 billion in assets under management. It has offices in Hong Kong, Shanghai, Beijing, Singapore and Tokyo.