Creador invests $15m in OldTown

14.05.12 / Author: Susannah Birkwood, Asian Venture Capital Journal

India- and Southeast Asia-focused investor Creador has injected RM45.7 million ($15 million) in OldTown White Coffee, the number-one Asian restaurant chain in Malaysia.

In exchange for the funding, the private equity firm will hold a 10% stake in the company, which equates to a P/E multiple of 11.3x.

OldTown was founded in 1999 and consists of its restaurant outlets and instant coffee business. It started as a producer of three-in-one packaged instant coffee, but launched its restaurant chain in 2005, which it has grown to 202 outlets, including 16 in Singapore, Indonesia and China.

The company currently commands a 10% share of the instant coffee market in Malaysia, 12% in Singapore and 23% in Hong Kong. It intends to grow the business into China and Vietnam.

OldTown’s turnover totaled RM285 million ($93 million) in 2011, alongside a net profit of RM40 million ($13 million). Revenues have grown 27% since 2008, and net profit grew 28%, providing a return on equity of 19%. This proprietary deal was sourced thanks to Creador’s analysis of the food and beverage industry in Malaysia and Indonesia.

Last month, one of Europe’s largest coffee companies, United Coffee, was sold by European private equity firm CapVest to Japan’s UCC Holdings. The deal, which was valued at EUR500 million ($617 million), was the first instance of an Asian coffee company buying one of its European counterparts.