By Alvina Yuen
Lunar Capital Management has acquired a majority interest in Sichuan Zhiqiang Group, an integrated food manufacturer located in western China, in a deal worth up to $50 million.
Through the purchase of a 60% stake in the 15-year-old Sichuan-based beverage brand, Lunar Capital has formed a new Chinese-foreign joint venture corporation to hold the company's business and assets, hiring Simon Liu, ex-head of Vitasoy China, as CEO, and adding Derek Sulger, founding partner of Lunar Capital, as Chairman.
Founded in 1995, Sichuan Zhiqiang is an integrated food manufacturer whose core product is walnut powder sold under the Joysun Zhiqiang brand name.
Sulger told AVCJ that he believes the consumption of high quality beverages will continue to grow in Western China.
“A business owner is willing to bring us on board with a heavy equity stake because they need our management, resources and skills,” says Sulger, adding that he is seeing more majority investments in the current cycle.
The investment was made through Lunar Capital Partners III, a 2009-vintage fund which has a corpus of $150 million – one-third of which is already invested for majority stakes in companies.
In January, Lunar Capital also backed the management buyout of China babywear company Yeehoo Apparel for an enterprise value in excess of $100 million and a stake in the region of 65%. Founded in 1995, Yeehoo designs and distributes baby products for children ranging from newborn to four-years-old.