StanChart private equity arm buys 'significant' stake in Phoon Huat

Standard Chartered logo is displayed at the bank's headquarters building in the Central district of Hong Kong, China, on June 27.
Standard Chartered logo is displayed at the bank's headquarters building in the Central district of Hong Kong, China, on June 27.PHOTO: BLOOMBERG

SINGAPORE (BLOOMBERG) - Standard Chartered's private-equity arm has bought a "significant stake" in Phoon Huat & Co, the Singapore company that's been selling baking ingredients since 1947, the investment firm said in an e-mailed statement on Monday (July 4).

Standard Chartered Private Equity completed the purchase of a majority holding in Phoon Huat last week, valuing the business at S$150 million to S$200 million including debt, according to a person with knowledge of the matter, who asked not to be identified because the information is private.

Standard Chartered Private Equity plans to eventually increase its stake in the business to 100 per cent, the person said. The deal excludes Phoon Huat's real estate, according to the person.

Phoon Huat, led by managing director Wong Chen Liong, provides baking ingredients under brands including "Red Man" to restaurants and hotels. It also runs about a dozen stores across Singapore selling supplies such as cookie sheets and cupcake liners and offers classes teaching amateur bakers how to decorate cakes and make the perfect bread loaf, according to its website.

Members of the Wong family that founded Phoon Huat will stay in management roles with the company, the person said. Including debt, the deal values Phoon Huat at more than 10 times earnings before interest, taxes, depreciation and amortization, according to the person.

PwC was the exclusive financial adviser to Phoon Huat, the person said.  A Singapore-based spokeswoman for Standard Chartered declined to comment beyond the statement. Phoon Huat didn't immediately reply to an e-mail seeking comment. A representative for PwC declined to comment.

The deal will add to the US$26.1 billion of consumer acquisitions in Southeast Asia companies during the last 12 months, according to data compiled by Bloomberg. Metro AG, Germany's largest retailer, agreed last August to buy Singapore gourmet-products distributor Classic Fine Foods Group for as much as US$328 million.

Standard Chartered Private Equity has announced at least US$956 million of deals globally in the past year, the data show. The firm said last June it invested US$52 million in Singapore-based restaurant chain Crystal Jade Culinary Concepts Holding Pte.