KKR debuts in Vietnam

The global private equity firm’s $159m investment in the food unit of Masan Group is KKR’s fourth deal in Southeast Asia.

Kohlberg Kravis Roberts has inked its debut deal in Vietnam, investing $159 million for a 10 percent stake in Masan Consumer, the food business of Masan Group.

The investment is the largest private equity transaction seen in Vietnam and KKR’s fourth investment in Southeast Asia, according to a statement. The firm’s previous investments in the region are Singapore’s Avago Technologies, MMI Holdings and Unisteel Technology.

Formerly known as Masan Food, Mason Consumer manufactures and distributes a range of food products, including fish sauce, soya sauce, chili sauce, instant noodles and edible oils.

“This investment demonstrates our strong conviction in the business prospects of Masan Consumer, as well as in Vietnam as a whole,” KKR executive Ming Lu said in the statement.

This investment demonstrates our strong conviction in the business prospects of Masan Consumer, as well as in Vietnam as a whole.

Ming Lu

The company’s revenue for the year ending 31 December 2010 stands at VND5.69 trillion (€188.9 million; $273.6 million), up from VND2 trillion in 2008. Following completion of the transaction, Masan Group’s stake in the company will decrease to 78 percent from 86.6 percent.

As one of Vietnam’s largest conglomerates, Masan Group has been involved in a slew of private equity transactions over the past 24 months. In January, US private equity firm Mount Kellett Capital Management invested $100 million for a 20 percent stake in Masan’s resource unit.

Local private equity firms have engaged with the conglomerate in the past, though on a smaller scale. Mekong Capital invested $9.4 million in Masan Consumer in May 2009 and sold its entire holdings later in November for a consideration of $18.84 million. The exit generated a 2x return multiple and a gross IRR of approximately 61 percent over an 18-month period.

In October 2009, TPG Capital and Denmark’s BankInvest agreed to invest more than $50 million for an undisclosed stake in Masan Group.