New Horizon Capital, a Beijing-based private equity firm is investing $30 million to acquire about 3.96 million shares of Exceed, a subsidiary of AMEX-listed holding company 2020 ChinaCap Acquiro.
The firm, which is making the investment through its wholly-owned subsidiaries from its first and third private equity funds, will also fund Windrace, a Chinese leisurewear company, in acquiring up to $2.5 million of 2020 ChinaCap Acquiro warrants on the open market. New Horizon may also invest up to an additional $13.1 million through the exercise of up to 2,500,000 warrants after the closing of the deal, Windrace said in a statement.
The investment will be used to partially repay a promissory note issued by Windrace to an affiliate of Goldman Sachs.
Established in 2002, Windrace designs, manufactures and sells footwear, apparel and other accessories in China under the brand Xidelong. The company has experienced growth in the mass market concentrated in the second and third tier cities in China, the statement noted.
New Horizon Capital has made 24 investments in China since its inception in 2005. In January, the firm closed its first RMB-denominated fund on RMB1 billion ($146 million; €103 million). The firm is also currently in the market for its third US dollar-denominated fund, which is targeting commitments of $750 million and has a hardcap of $1 billion.
New Horizon declined to comment.