Nordic private equity firm EQT Partners has completed another deal in China by way of an undisclosed size investment in Qinyuan Bakery, an EQT spokesperson confirmed to PEI Asia.
According to the spokesperson, EQT bought both newly issued shares as well as secondary shares from the founders. EQT will acquire a 65 percent stake in the company over the course of two years following further commitments. The founders of the company will retain the remaining stake, the spokesperson said.
The investment was made from EQT Greater China II, a $535 million vehicle which closed in January 2007. The transaction was made in two stages, with the first payment made on November 8, the spokesperson said. Following capital verification from the Administration of Industry and Commerce, the final payment was made on December 20.
EQT declined to comment on the investment size, but EQT Greater China II typically invests between $20 million and $100 million per equity cheque, the spokesperson stated.
Qinyuan Bakery was established in 1989. Originally based in Chongqing, the company has since expanded operations to Guizhou, Chengdu and Shanghai. EQT said the fresh capital would be used to enhance the company’s presence in current geographies and eventually expand into new markets.
“When entering the next development phase, EQT Greater China will contribute its industry knowledge from the retail sector but also from the European bakery sector in which EQT has significant experience,” said Martin Mok partner at EQT Partners in the statement.
The firm had earlier this month made its sixth deal from EQT Greater China II when it acquired a 30 percent stake in Modern Metal & Precision, a Chinese manufacturer of aluminium die casts. The size of that deal was also undisclosed.
Previous investments made from the fund include the acquisition of a 40 percent stake in Japan Home Centre, a discount house-ware retail chain based in Hong Kong; a 48 percent stake in LaoBaiXing, a Chinese discount pharmacy store chain; a 99 percent stake in PSM International, which provides fastening products to the automotive, mobile phone, notebook PC and general industries; and a 79 percent stake in Yin Rong, a Chinese juice manufacturer.
There has been growing focus on China’s consumables space. Earlier this week, global private equity firm Kohlberg Kravis Roberts invested an undisclosed sum in VATS Liquor Store. The Beijing-based liquor store chain operator had just a month earlier announced an RMB250 million (€28.5 million; $37.5 million) capital injection from China-focused New Horizon Capital.
Around the same time, a consortium which included Hopu Investment Management and LP and frequent co-investor Temasek Holdings committed HK$1.55 billion (€150million; $200 million) to Asian Citrus Holdings, the largest orange plantation owner and operator in mainland China.