The international private equity firm KKR, has agreed to invest $250 million USD in Vietnam’s Masan Group Corporation and its Masan Nutri-Science unit which will allow the company to expand its presence in the animal feed and meat industry.
KKR invested $159 million into the Vietnamese conglomerate’s consumer goods arm, Masan Consumer in 2011 for a 10% stake in the company and then expanded the investment by an additional $200 million to increase its shares to 18%.
This newest transaction, once completed, will bring the total financing by KKR into Masan Group to $609 million. The two rounds of funding made it the biggest private equity investment in Vietnam.
IN 2015 and 2016, KKR divested its entire holding shares to the Vietnamese group. KKR had earlier announced its partial exit in 2015 generated a 100 per cent return on initial investment.
The latest financing agreement includes a $100 million purchase of secondary shares of Masan Group from PENM Partners, and a $150 million primary investment into Masan Nutri-Science for a 7.5% stake in the company.
PENM Partners invested in Masan Food’s in 2008 and then converted those shares into shares Masan Group in 2009. PENM has also invested in Masan Resources, the operator of Nui Phao, the world’s largest tungsten mine.
“Masan has been PENM’s most successful investment in Vietnam and we look forward to continue partnering with them through our other funds and serving on their Board of Directors,” commented Hans Christian Jacobsen, managing partner of the Danish private equity investor.
Masan has been aggressively expanding in the animal feed and meat industry, which is valued at more than $18 billion USD. To realize this goal, Masan took controlling stakes at Vietnam French Cattle Feed and Agro Nutrition in 2015 to form Masan Nutri-Science and in 2016 Masan won over South Korea’s CJ Corporation to purchase shares in Vissan, Vietnam’s leading state-owned meat processor.
The meat industry in Vietnam is highly fragmented and lacks productivity and consistent quality standards. The investment by KKR, coupled with its expertise in agribusiness, is expected to help Masan Nutri-Science develop the company’s integrated consumer meat platform.
Ming Lu, head of KKR’s Asia private equity business said of the new deal that - “We have witnessed them (Masan) develop a seasonings company into a $2 billion diversified consumer group and look forward to again backing Masan as they execute their growth plans”.
Ashish Shastry, head of KKR in Southeast Asia also said of the transaction, “This investment underscores our commitment to Vietnam in particular and to ASEAN generally. Vietnam holds great opportunity with its growing economy and favorable demographic trends. KKR is committed to investing in the market by partnering with leading companies such as Masan Nutri-Science.”