KKR buys stake in Indonesian poultry major
The deal, worth around US$81.2m, involves the issue of 750m new shares via a private placement, while Japfa will sell 441.7m existing shares to KKR, which has a history of investing in Indonesian companies, including Tiga Pilar Sejahtera Food, one of the country’s leading food businesses.
“We believe PT Japfa will benefit from KKR’s deep knowledge and experience in the agriculture and food sector, and its long-term investment thesis of promoting and enhancing the availability of safe and healthy food. We look forward to deepening our partnership with KKR in the future,” said Tan Yong Nang, chief executive of Japfa, which produces chicken, beef and milk, as well as protein-based consumer food products for China, India and Southeast Asia.
Ming Lu, co-head of Asia private equity at KKR, said that Indonesia’s rising middle-class, favourable urbanisation trends and increasing protein consumption brings significant potential for the country’s poultry market, which PT Japfa services.
“Indonesia holds tremendous opportunity given its dynamic economy and rising GDP. The market is on track to be one of the top-10 global economies within the next 15 years,” added Jaka Prasetya, managing director at KKR Asia.
The private placement and share sale transactions are part of an overall strategy to introduce fresh equity funding to strengthen Japfa's balance sheet. In addition, Japfa will record a capital gain of approximately US$21.2 million from the sale of its shares in PT Japfa.
The transactions are conditional upon the approval of the issue of new shares by PT Japfa shareholders at and extraordinary general meeting which will take place on July 1.
