A number of homegrown Malaysian companies have been sold to foreign major corporations and private equity firms in recent years. Japan’s Asahi, which acquired Permanis in 2011, bought Etika Diaries Sdn Bhd in 2014. At the end of 2017, the Dutch coffee house Jacobs Douwe Egberts made the offer to buy OldTown and the shares of OldTown were finally delisted from Bursa Malaysia on 4 April 2018.
CVC buys Munchy
On 12 June 2018, CVC Capital Partners Asia Fund IV announced it had acquired a 100% stake in Munchy Food Industries Sdn Bhd (MFI) and its Malaysian subsidiary Munchworld Marketing Sdn Bhd. According to the press release, Munchy’s had a 21.5% share of Peninsular Malaysia’s RM1.044 billion biscuit market in 2017, data from Nielsen shows.
The value of the deal was worth USD 250 million or RM 998 million, Bloomberg news reported citing informed sources.
Mr LK Tan, co-founder of MFI, describes the deal as having the potential to turn Munchy into a “global powerhouse” with CVC on board. Over the past 25 years, Munchy has grown into the second largest biscuit player in Malaysia and exports to around 50 countries.
Tan added “CVC’s vision for the brand aligned extremely well with our identity. Their global network and experience will be invaluable in growing the Munchy’s brand into a global name – with new markets, new technology and new innovations”
Munchy was 70% owned by its founders and 30% by TAP Crunch Sdn Bhd, a joint venture between the civil servant pension fund KWAP and PE firm Tremendous Asia Partners Group, which acquired the 30% stake in Munchy in 2014.
Potential share listing for Munchy down the road
With CVC on board, there is a high chance CVC will want to exit at a high price and this would involve floating Munchy on the share exchange.
QSR, 30%-owned by CVC, floating it shares in November 2018
CVC’s other investment in Malaysia is a 24% stake in QSR Brands (M) Holdings Sdn Bhd, which operates KFC restaurants in Malaysia, Singapore, Cambodia and Brunei, as well as Pizza Hut restaurants in Malaysia and Singapore. CVC acquired the stake in 2011. Now, the plan is for QSR to list its shares on Bursa Malaysia in November 2018 to raise RM 2 billion.
In the 12 months to December 2015, MFI revenue stood at RM 283.68 million with a net profit of RM 41.34 million, reported The Edge. Revenue rose to RM 300 million in 2016 and the company expected a 30-40% rise in revenue in 2017 over 2016 citing rising demand for 7Days Croissant and other products, reported The Star.