HSBC Private Equity (Asia), the Asian private equity arm of HSBC Group, has partially exited its investment in Bosideng International Holdings, one of China’s largest manufacturers of winter clothing.
The Hong Kong-based firm sold a stake of 2.77 percent in the company to China-focused venture firm IDG Capital Partners for approximately HK$243 million ($31 million; €21 million), representing a price of HK$1.13 per share. Bosideng was trading at HK$1.23 at the time of writing.
After the transaction, HSBC Asia remains the second largest stakeholder in the company, with about 5.16 percent of the company's equity.
Hong Kong-listed Bosideng develops and manages a portfolio of down apparel brands including Bosideng, Snow Flying, Kangbo, Bingjie, Shuangyu and Shangyu. The company has 5,662 retail outlets across 65 cities in China. This May, it formed a joint venture with brand management company Iconix China to launch Rocawear (China), a US clothing line, in the country.
In addition to its stake in Bosideng, IDG plans to acquire a 10 percent stake in Rocawear and will also grant a HK$20 million loan to the company. Its investment will be used to open about 300 Rocawear stores and develop the Rocawear brand over the next three years, according to a Bosideng statement.
Bosideng will be able to leverage IDG’s strong experience in backing startups, William Shen, a managing director and head of greater China at HSBC Asia, said in an interview. IDG approached HSBC as the company’s low trading volume made it challenging for the firm to buy a stake in Bosideng through the open market, he added.
HSBC Asia first invested in Bosideng in September 2006, when it acquired a stake of 12 percent in the company for about $70 million. The investment was made out of HPEF 3, which closed on $700 million in 2004. The fund has since been fully invested.
The firm typically invests between $40 million and $150 million in China, South Korea, Southeast Asia and India. In China, it focuses on expansion capital investments in consumption-oriented businesses. Last December, it closed HPEF 6 on approximately $1.5 billion, surpassing its target of $1.25 billion.
Backed by US-based venture capital firms International Data Group and Accel Partners, IDG Capital Partners manages more than $2.5 billion in capital. The firm typically invest between $1 million and $100 million primarily in the technology, telecom, media, healthcare, energy, clean technology, consumer business and service sectors. It has offices in Hong Kong, Beijing, Shanghai, Guangzhou, Shenzhen, Silicon Valley and Boston.