Bain Capital, a leading private investment firm with approximately $180 billion of assets under management, has agreed to invest at least $200 million of equity capital into Masan Group Corporation (HSX: MSN).
The transaction is an equity investment in the form of Convertible Dividend Preference Share (CDPS) to be issued at a price of VND85,000 ($3.49) per share, which can be converted into ordinary shares at a 1:1 conversion ratio. In addition to the normal dividends payable (if any) to the company’s shareholders, the CDPS has no preference dividend for the first five years, then followed by a 10 per cent preference dividend at par value of each outstanding CDPS per annum from the sixth anniversary onwards.
On the tenth anniversary of the issuance, the outstanding CDPS will be mandatorily converted into ordinary shares of Masan Group. Masan is also in discussion with other investors to upsize the investments to up to $500 million, which is subject to prevailing market conditions and the company’s capital needs.
Proceeds from the transaction will be used to strengthen the company’s financial position and de-lever its balance sheet. This marks Bain Capital’s first-ever investment in Vietnam and underscores the confidence it shows in Masan’s ability to fulfill 100 million Vietnamese consumers’ daily grocery, financial, and other life needs.
Vietnam is the fastest consumption growth market in Southeast Asia with forecasted annual growth of 7.7 per cent between 2022 and 2040, underpinned by increasing urbanisation and an exploding consumer class with higher disposable income and evolving demands extending beyond basic needs to lifestyle and financial ones.
Masan has been transforming from a pure branded products company into an integrated consumer-retail platform to consolidate the growth potential across the consumer value chain. In that respect, Masan has identified 3 multi-year secular growth trends.
First is 'premiumisation' and health-led innovations, served by its fast-moving consumer goods business, Masan Consumer Holdings. Second is the transition from unbranded to branded and increasing demand for higher-quality animal protein, provided by Masan MEATLife. Another trend is the shift from general trade to modern trade, accelerated by its retail platform, WinCommerce.
At the centre of Masan’s platform is WIN Membership – the platform connecting brands and consumers – which has reached 7 million members and is targeted to reach 10 million members by year-end, and 30 million members by 2025. The WIN Membership platform allows Masan to provide more personalised, targeted products and services to better serve Vietnamese consumers and will serve as a critical growth engine for the company.
Danny Le, CEO of Masan Group, commenting on the transaction, said, “In the face of a challenging consumer environment, Masan has continued to invest in our platform and breakthrough innovations to position ourselves for the consumer upswing. Bain Capital’s partnership is strong validation of all the consumer-centric investments and transformations we have made over the past 18 months to win 80 per cent of the market share. We look forward to working with Bain to accelerate our vision to be the one-stop shop for daily needs.”
“We are thrilled to partner with Masan for an important investment in Vietnam and believe that Masan has the right fundamentals, reach, and growth strategy to succeed in a high-growth and compelling consumer market," said Barnaby Lyons, a partner at Bain Capital.
"Masan is one of the most trusted brands in Vietnam, with significant reach and the ability to anticipate consumer tastes and meet those needs innovatively. We see a significant opportunity to invest in Masan’s continued growth and first-class management team,” Lyons added.
Bain Capital has in-depth experience in investing to support the growth and leadership of a diversified set of consumer and retail businesses in Asia, including Schwan’s Company and Carver Korea.
Masan expects the transaction to be finalised by the end of this year and will continue to explore other strategic alternatives for equity capital, including diluting its interest in non-core businesses, to bolster its liquidity profile.
Jefferies Singapore Limited acted as the financial advisor to Masan Group and the transaction is subject to customary corporate and regulatory approvals.
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