International private equity firm Actis has made a $10 million investment for a 20%-30% stake in China Wolfberry Holding Company. The company is China's largest producer of wolfberry wine sold under its main brand Ning Xia Hong.
For those not up to speed on the latest trends in fruit, Wolfberries are rich in beta carotene and vitamin C with widely believed health benefits in mainland China and increasingly elsewhere. The fruit is now appearing in trendy cosmetics, alcopos and herbal wines.
Looking for the next Red Bull investment, Actis has made its investment in the company and is helping with strengthening the management team and providing some business strategy guidance. China Wolfberry has forecasted sales in 2004 of up to $40 million and is run by Jinshan Zhang, who has been with the company for ten years.
"We are excited about the opportunity to work with Mr. Zhang and his team to build China Wolfberry, which is already a highly successful company, into one of China's top brands," says Chin Bay Chong, managing partner of Actis. "We are uniquely experienced in helping entrepreneurial companies grow their businesses and look forward to working with the company to help it access the international capital markets."
Actis was formerly called CDC Capital Partners and was owned by the UK government but was bought out by the management early this year. The team has a good track record of spotting China companies and then taking them to IPO, having invested in Meng Niu Dairy and CNOOC. It has $2.7 billion under management and 72 investors. The firm specializes in emerging market investing.
This deal looks like a precursor to a public listing with Zhang stating, "I am confident that they [Actis] will play a key role in assisting our future expansion and our preparation for a public listing." Looks like this deal will bear fruit and not leave investors howling in the wind.