EQT exits China’s Qinyuan Bakery

The private equity firm has sold its majority interest in the South China business, having increased EBITDA by 3.6x

EQT Greater China, the Asian arm of Stockholm-based EQT Partners, has sold its investment in Chongqing New Qinyuan Bakery, a retail bakery chain in Southwest China, to Swire Foods, a subsidiary of Hong Kong-based conglomerate Swire Pacific, according to a statement.

The firm held a 65 percent stake in the business, which it acquired in 2010, but financial details of the transaction were not disclosed.

Since its investment, EQT helped strengthen the company’s corporate governance and leveraged EQT’s network and experience in the consumer and retail sector. The store has also expanded its footprint, with store formats being upgraded to include on-site baking.

By its exit, EQT had improved the firm’s EBITDA by 3x, increasing its top line revenue growth by a similar figure, Martin Mok, partner at EQT, said. The firm declined to disclose return figures for the investment.

“We have more than doubled Qinyuan Bakery in size during the past four years since EQT invested. It is a result of successful integration of EQT’s corporate governance model, a good market development and the management team’s dedication to grow the business. We are confident Qinyuan Bakery will continue to do well with Swire Foods as our new partner,” Chong Mei Liu, founder and chief executive of Qinyuan Bakery, said.

EQT is currently investing out of its first joint Europe and Asia vehicle, which is now around 60 percent deployed, according to Mok. The fund’s 10 investments have been roughly split between the Nordic region, Germany and Asia, with the firm expecting to have fully deployed capital from the vehicle by the end of 2015. Mok declined to comment on future fundraising plans.