Mekong gains 21.8x on MobileWorld share sale

Chris Freund’s firm has sold 9% of the company, known locally as TheGioDiDong, in a partial exit.

Vietnam’s Mekong Capital has sold over 5.6 million shares in its investment in MobileWorld, a domestic mobile phone retailer known as TheGioDiDong, at VND 85,000 ($4; €2.9) per share, according to a statement.

The sale price values the total exit at about $22.5 million, with the firm reaping a 21.8x return on its original investment in the business, it said.

The placement was 2.5x oversubscribed and allocated to six foreign institutional investors, as well as Vietnamese retail investors.

The transaction values the total company at $250.6 million and Mekong will continue to hold 14.3 percent of MobileWorld’s shares after completion.

“MobileWorld’s board of directors and management team, under the leadership of the chairman and chief executive, Nguyen Duc Tai, have done an excellent job building MobileWorld into the leading mobile device retailer in Vietnam,” Mekong founder and partner Chris Freund said in a statement.

“MobileWorld’s success is due to their open-mindedness about learning best practices from outside, their great ability to successfully implement those best practices in Vietnam, and their commitment to customer satisfaction. MobileWorld is a great example of what it looks like to build a robust management team and a strong corporate culture in Vietnam.”

Mekong originally invested in MobileWorld in June 2007, injecting around $4.5 million in the business, Private Equity International reported earlier. Since, MobileWorld has also attracted Hong Kong-based CDH Investments, which bought a small stake in the business from Mekong in early 2013.

Mekong also won a PEI Operational Excellence Award in 2013 for its investment in the Vietnamese business, having made substantial operational improvements since its investment.

The firm helped MobileWorld implement systematic business processes, which included launching detailed reporting systems, as well as working hard attracting young, talented directors and managers. Mekong also brought in Bob Willett, the former chief executive of US-based BestBuy International, as an independent director and consultant.

“I want to acknowledge MobileWorld’s independent director, Bob Willett, for his huge contribution both in sharing best practices with the company, and also for his support during the process of placing the shares and the upcoming listing. Mr. Willett’s past experience has been immensely valuable for MobileWorld,” Freund added.

Mekong invested in MobileWorld from its second private equity vehicle, which has made 10 investments – six of which have been fully exited, according to the firm.