Standard Chartered Private Equity (SCPE) has bought a stake in home- grown company Phoon Huat, the latest in a recent string of mergers and acquisitions across Asia.
SCPE yesterday said it has invested "a significant stake" in Phoon Huat, which is a wholesale supplier of baking ingredients and is well-known for the Red Man brand of products. It operates 13 stores across Singapore.
The deal is said to value Phoon Huat at $150 million to $200 million, an anonymous source told Bloomberg, adding that SCPE plans to eventually acquire full control.
SCPE and Phoon Huat declined to comment on these details.
Phoon Huat managing director Wong Chen Liong said in a statement that SCPE's investment "bodes well for our succession planning, which we had been planning for the last five years".
"As a leading player in this industry, we owe it to our employees, customers and suppliers to ensure continuity and prosper together," Mr Wong added.
The Phoon Huat venture marks SCPE's fifth investment deal in Singapore since 2004, Bloomberg data shows.
It invested US$52 million (S$70 million) in June last year in restaurant operator Crystal Jade Culinary Concepts, which is owned by L Capital Asia, the private equity arm of luxury brand LVMH Moet Hennessy Louis Vuitton.
It also invested an undisclosed amount in Navigat Group in 2012, $301.9 million in Amtek Engineering in 2007, and RM86 million in Unza Holdings in 2004.
Singapore is just a portion of SCPE's portfolio, which targets mainly Asia, Africa and the Middle East. Since its founding in 2002, the firm has invested around US$6 billion in more than 100 firms.
The activity at SCPE reflects the healthy appetite of private equity for growth assets in this region.
"In this environment where we have low economic growth, low interest rates and hence low yield, the search for return is challenging. That's why we're seeing more capital deployed into the private equity scene," CIMB Private Banking economist Song Seng Wun said.
"A company like Phoon Huat or Crystal Jade offers exposure to growth opportunities in the food and consumer segment, which still commands very good potential for return given the demographic demand in Asia."
Private equity fund Tower Capital teamed up with Temasek Holdings' Blanca Investments in May in an ongoing bid to privatise mainboard-listed Chinese traditional medicine firm Eu Yan Sang.
Technology and Internet com- panies are another sector that is drawing plenty of private equity attention.
In February, SCPE was part of a consortium that invested around US$270 million in Souq.com, an e-commerce portal in the United Arab Emirates.
