Category: Enterprise
Chinese hotel management GreenTree Group to buy CVC-backed Da Niang Dumplings
Chinese fast food restaurant chain Da Niang Dumplings Holdings Ltd., since its acquisiton by CVC Capital Partners in 2013, is now being resold again to Chinese hotel group GreenTree Inns Hotel Management Group, Inc., according to an official statement posted on the website of Ministry of Commerce’s anti-monopoly bureau.
As per details of the acquisition, the online new announcement disclosed that a wholly owned subsidiary unit of the Shanghai-based budget hotel group is to acquire the 100 per cent stakes of Da Niang Dumplings, which operates over 400 restaurants across China.
Besides, it is also noted that GreenTree is acquiring the shares directly from Da Niang Dumplings, instead of CVC Capital, which goes to hint that CVC may have sold its control stakes in Da Niang Dumplings prior to this deal.
Da Niang Dumplings, following CVC’s acquisition of the Changzhou, Jiangsu province-based chain, has in recent years suffered from intense competition, frequent conflicts between its founder and controlling shareholders which resulted in a year-after-year declining performance.
The company’s founder Wu Guoqiang, who retained a 10% stake in Da Niang, said revenues declined by 10% in each of 2014 and 2015 is largely due to mismanagement, specifically because of the cost cutting efforts initiated by CVC. The fast food chain also has quite a frequent change of directors, having welcomed three new CEOs in a span of three years.
Founded in 2004, GreenTree manages and franchises over 2,500 properties in and outside of China. The hotel group, with no prior experience in the food and restaurant businesses, was reportedly one of the bidders for McDonald’s China and Hong Kong unit, which was acquired by CITIC Group and the Carlyle Group earlier this month.
Having successfully acquired Da Niang Dumplings, GreenTree could potentially realize synergies with the fast food chain as both businesses are targeting the lower end consumer market. GreenTree Inn’s most high-end hotel for the Green East is priced at 300 to 600 yuan range while Da Niang Dumplings prices are set between 25 to 34 yuan.
By Vivian Foo, Unicorn Media
China Exim Bank fund buys Hungarian telecom firm Invitel for US$214 million
An investment fund established by the Export-Import Bank of China and other institutional investors has agreed to purchase Hungarian telecommunications company Invitel Group at an enterprise value 4.5 times of its 2015 EBITDA, that is €202 million (US$214 million).
The China-CEE fund represents a US$435 million private equity fund, established by China Exim Bank in partnership with central and eastern European institutional investors, with current investments in countries including Poland, the Czech Republic and Bulgaria.
The transaction is subject to customary closing conditions, including local competition authority clearance, and is expected to be completed in the first quarter of 2017.
CEE Equity Partners, the investment advisor to the China CEE Investment Cooperation Fund, is to buy the company from Mid Europa Partners, a buyout investor in central and south eastern Europe with over €4.3 billion (US$4.6 billion) in funds raised since inception.
“Under Mid Europa’s leadership, we have strengthened Invitel’s position in the Hungarian market and we are grateful for their support. We look forward to further developing the business under the ownership of CEE Equity,” said David Blunck, the CEO of Invitel.
TeleGeography’s GlobalComms Database (GCD) notes that Mid Europa’s decision to sell Invitel lies in line with its widespread telecoms sector divestment strategy whereby Mid Europa, focused on the central and south-east part of Europe, sold its only other remaining telco subsidiaries Bite Latvia/Lithuania in Q1 2016.
At present, Invitel is the second-largest incumbent fixed-line telecommunications and fourth-largest fixed broadband Internet operator by subscribers, having delivered business and residential services over a range of access platforms including copper PSTN, cable, fibre, and fixed-wireless.
Invitel is also the PSTN provider in 14 of Hungary’s 54 historical fixed line concession areas, covering more than one million homes in Hungary, including both residential and corporate customers. While its 9,000km fibre-optic transmission backbone network gives it nationwide reach, connecting all the country’s major urban centers, with eleven border crossing point.
Invitel has been controlled by Mid Europa since 2009 and is currently 99.99% owned by Magyar Telecom BV, which in itself is 51 percent owned by Mid Europa’s 100 percent-held unit Hungarian Telecom BV and 49 percent by Cayman Islands-incorporated, UK-registered Matel Holdings Ltd which is owned by bondholders.
Established in 1994, the Export–Import Bank of China, also known as China Exim Bank, is one of three institutional banks in China chartered to implement the state policies in industry foreign trade, as well as to provide financial support to promote the export of Chinese products and services.
China Exim Bank has long been an investor in developing nations in Africa and Asia, but in recent years, the Chinese bank has been expanding its investments in Eastern Europe. Solely owned by the Chinese government and under the direct leadership of the State Council, the bank’s international credit ratings are the same as China’s sovereign ratings.
By Vivian Foo, Unicorn Media
Comic art platform Kuaikan Manhua closes US$36 million Series C round led by Tiantu Capital
China’s Tiantu Capital has led a 250 million yuan (about US$36 million) Series C round funding in Kuaikan Manhua, an online and mobile platform for original online comic artwork targeting young readers.
The financing round was reportedly completed in October last year and other investors who also participated in the round include Sequoia Capital, GX Capital, Engage Capital and Chinese news reader app, Toutiao.com. This brings the value of the Beijing-based startup at over 1 billion yuan (approximately US$140 million).
“China’s animation and comics content market are in the initial development stage. It is also an area that the Chinese government encourages,” said Neil Shen, the founding managing partner at Sequoia Capital China. “Kuaikan Manhua focuses on a niche market and has successfully established a leading position.”
Founded in 2014 by a well-known animation artist Chen Anni, Beijing-based Kuaikan Manhua currently has active monthly readers of 24.6 million while daily viewership reaching 7.27 million. The platform has signed over 1000 works and more than 500 comic artists, where some of the popular authors has a fan base of over one million.
Aside from the increase in the magnitude of users and works, the comic artwork startup has also recently moved their office to Wangjing Soho as well as an increase in company size, increasing from the original 40 employees to a recruitment of more than 100 people.
Upon the completion of this financing round, the capital will mainly be used in the cooperation with the external CP as it can be difficult to solve the problem of creating self-published content which requires professionals as well as the expenditure of energy in order to build a solid team.
Besides, the platform will still retain its original intents of providing light comics, targeting the new generation of young readers and their fragmented time in reading comics – that is an average daily usage of about 40 minutes, according to the data from Kuaikan.
The company previously raised 100 million yuan (about US$14 million) in a series B financing round from unnamed investors in 2015.
Axiom Asia Private Capital closes new Asian fund-of-funds at US$1.03 billion
Singapore-based Axiom Asia Private Equity (PE) has completed the final close of its oversubscribed fourth fund, Axiom Asia IV, with US$1.03 billion in total commitments from a selected group of institutional limited partners (LPs) which exceeds its target of US$750 million, the firm announced today.
Limited partners in the latest fund include Montana Board of Investments, the Michigan Department of Treasury, and Caledonia Investments, among others.
Fund IV will continue Axiom’s strategy of offering investors access to a portfolio of top-tier, Asian-focused private equity funds that can provide attractive risk-adjusted returns. The PE firm will target investments in buyout, venture capital, growth capital and other private equity (PE) funds.
“We seek to invest with fund managers who bring unique and advantaged capabilities to capitalize on opportunities in their local markets and continue to emphasize commitments to highly capable next generation fund managers who are raising first or second funds,” explained Chris Loh, a managing partner at the firm.
To demonstrate its belief and to further align its interest with its limited partners, the funds has also seen the general partner (GP) increase its commitment in every successive Axiom Fund with Fund IV’s commitment increased by one and half times compared to its LPs.
Despite that, this latest fund is slightly smaller than its predecessor Axiom Asia III, which had closed at US$1.15 billion in March 2012. On the other hand, the firm’s first fund closed in 2007 at US$440 million while its second fund closed in 2010 at US$950 million.
As a whole, Axiom currently manages four private equity fund-of-funds with total commitments of over US$3.5 billion. It is led by Managing Partners Edmond Ng, Chris Loh, Alex Lee, and Marc Lau while maintaining offices in Singapore and Hong Kong.
Axiom, which makes secondaries purchases through its funds of funds, in addition to co-investments and direct investments, as well as its main activity of investing in private equity funds across buyout, growth capital and venture capital, focuses on markets such as Japan, Korea, China, Southeast Asia, Australasia, and the Indian subcontinent.
“We believe that private equity in Asia remains one of the most promising asset classes to invest in because of the economic dynamism of the region. Asia continues to possess the largest concentration of rising middle-class consumers which provide a unique growth driver for companies,” said the managing partner at Axiom Asia, Alex Lee.
On the close of Fund IV, Edmond Ng also said, “We had a strong re-up rate and are very grateful for the support from our existing and new investors. The amount raised is a testament to the strong track record of Asian fund managers who have proven their ability to innovate and create profitable investment opportunities. It also highlights the appeal of our differentiated investment strategy that can generate returns even in times of market volatility.”
Over the past five years, the median size of the 1,000 or so institutional-quality general partners in Axiom’s universe has declined to US$300 million from between US$400 million and US$500 million, as the share of total flows claimed by bulge-bracket players continued to grow.
U.S.-based funds announcing commitments to Axiom Asia IV include Nashville (Tenn.) & Davidson County Metropolitan Government Employee Benefit Trust Fund, which committed up to US$60 million; the Michigan Department of Treasury’s Bureau of Investments, which committed up to US$50 million on behalf of Michigan Retirement Systems, East Lansing; and Montana Board of Investments which has contributed US$25 million.
By Vivian Foo, Unicorn Media
Australian media tech firm Isentia Group buys China Newswire to grow distribution business in Asia
Media intelligence firm Isentia Group Ltd., which is listed on the Australian Securities Exchange (ASX), has recently acquired content marketing and media database SaaS company, China Newswire.
The deal closed at the end of 2016, with notifications to staff and China Newswire clients going out on 5 January 2017. Neither Isentia nor China Newswire has disclosed financial terms.
Based in Shanghai, China Newswire is a media syndication and big data company that claims to reach 30,000 media outlets, journalists, social media writers and key online influencers, providing SaaS content marketing and content syndication services.
China Newswire CEO Danny Levinsion is an American entrepreneur and has been building tech businesses in China since 1997. He is based in Beijing and previously sold his SaaS media intelligence business to Vocus and became Vocus’ Chief Executive in China.
Following the acquisition, Danny Levinson will assume the role of Asian regional director at Isentia. This new role will see him working with Isentia’s Sydney-based executive team to grow the company’s content syndication and distribution business in Asia.
This acquisition also comes at a time when the content distribution, influencer outreach, and media analytics sector has experienced consolidation in Asia in the past few years.
Globally, Cision has acquired PR Newswire, which competes with China Newswire in Asia. While Vocus sold its China assets including China Newswire, to Matoka Capital prior to the Cision merger, and also Nasdaq’s purchase of Toronto-based Marketwired. New promising PR firms such as PRWire Asia are also surfacing in the market.
Prior to this, Isentia – the publicly-listed content distribution and media analytics technology company has, through its many acquisitions like King Content, MediaBanc, and Brandtology, been operating in Greater China for more than 25 years. At present, the company has offices in Beijing, Shanghai and Hong Kong with more than 150 employees.
On the other hand, China Newswire has been operating in China for at least a decade and was previously owned by U.S.-based Vocus, which later merged with Cision in 2014 when both companies privatized and were bought by Chicago-based private equity firm GTCR. This was subsequently followed by Cisions’ acquisition and integration in PR Newswire.
By Vivian Foo, Unicorn Media