Hopu joins COFCO in $1.5bn Noble deal

Led by founder Fanglei Fang, Hopu has joined the Chinese SOE as a minority investor.

Hopu Investments will become a minority investor in an agri-business joint venture formed by two agricultural companies, state-owned COFCO Corp and Singapore-listed Noble Group, according to a joint statement.

The joint venture, called Noble Agri, will be 51 percent held by a consortium led by China-based COFCO. The all cash transaction values Noble Agri equity at 1.15x its 2014 book value. 

Noble Group will hold the remaining 49 percent.

Noble Agri had shareholders’ equity of $2.8 billion and net debt of $2.5 billion, as of 31 December 2013, with Reuters reporting COFCO’s entire investment in the business as $1.5 billion.

Hopu and other undisclosed international investors join COFCO as minority investors in the transaction, according to the statement. COFCO will make up two-thirds of the investment vehicle, with the balance coming from the minority investors.

Frank Ning, chairman of COFCO will assume the role of chairman of the joint venture, while Richard Elman, founder and chairman of Noble Group, will take on the role of deputy chairman. Yusuf Alireza, chief executive of Noble Group, will be the interim chief executive.

“Noble Agri’s supply chain management system and origination capabilities complement COFCO’s logistics, processing, and distribution network in China. Incremental trade volumes from COFCO as a strategic investor will create significant synergy and value,” COFCO’s Ning said in a statement.

Hopu Investments is a private equity firm with offices in Beijing, Hong Kong and Singapore and strategic partners in New York and London. Founded by former Goldman Sachs banker, Fanglei Fang, Hopu has partnered with a number of heavyweight investors for deals.

In November, the firm teamed with Singaporean sovereign wealth fund Temasek and other investors to buy a 13.24 percent stake in Yashili International, a China-based dairy company that counts The Carlyle Group among its former owners, media reported earlier. The consortium paid around $213 million for the stake.

Hopu is currently raising its second fund, which could raise as much as $1.6 billion by June, according to media reports. The firm had an initial closing on $1.1 billion at the end of 2013, according to the firm.