September 19, 2024

 

Malaysian firm Creador acquires 40% stake in poultry company CCK's Indonesian unit

Malaysia-based private equity firm Creador Sdn Bhd has entered into an agreement with poultry company CCK Consolidated Holdings Bhd to invest MYR 163.1 million (US$38.3 million) for a 40% stake in its Indonesian subsidiary, PT Adilmart Tbk, The Edge reported.

 

The investment amount is slightly lower than the initial MYR 170.3 million (US$40 million) proposed when the deal was first announced in May.

 

In a filing, CCK confirmed that it had signed definitive documents, including a conditional share purchase and subscription agreement with Astrantia Sdn Bhd, a special-purpose vehicle established by Creador for the acquisition.

 

Under the terms of the agreement, Astrantia will acquire existing shares from CCK and subscribe to new shares in three tranches. The first tranche involves the acquisition of a 26.5% equity interest in Adilmart for MYR 88.1 million (US$20.7 million). The second and third tranches will involve share subscriptions amounting to MYR 75 million (US$17.6 million).

 

CCK noted in its bourse filing that the proposed disposal will raise MYR 88.1 million (US$20.7 million) for the group, bolstering its financial position and providing flexibility to pursue new business opportunities, fund working capital, and reward shareholders.

 

The share subscription will also provide Adilmart with additional capital for growth while reducing its reliance on expensive debt financing.

 

Livia Chan, Creador's country head of Malaysia and executive director, expressed the private equity firm's enthusiasm about partnering with PT Adilmart, highlighting the company's profit growth, which has seen a 50% compounded annual growth rate over the past five years.

 

"Our focus will be on expanding its production capacity and accelerating distribution across new regions in Indonesia," Chan said.

 

CCK, which holds a prominent position in the fresh mart retail industry in East Malaysia with 73 stores, has established a strong presence in Indonesia's frozen food sector, particularly in Kalimantan and Central Java.

 

John Tiong, CCK's group managing director, stated that the group plans to leverage Creador's experience in the consumer sector and its own established distribution network in Indonesia to further its growth strategy.

 

"With the commissioning of our third facility on the horizon, we are well-positioned to meet increasing market demands," Tiong added.

 

Creador has a strong history of investments in Indonesia, having backed four unicorns in the country, including Mr DIY Indonesia, Cimory, BFI, and Hermina. This acquisition marks Creador's 55th investment since its founding and reinforces its commitment to the Indonesian market.

 

-      The Edge