CVC eyes a big cheque from MAP Aktif Adiperkasa

CVC Capital Partners is ready to complete one of its most profitable deals in Asia. It could raise up to $353 million when it divests its majority stake in the Indonesian sports goods retailer.

CVC Capital Partners is on course to seal one of its most profitable investments in Asia if the private equity firm can complete a Rp4.2 billion to Rp5 billion ($296 million to $353 million) share sale in Indonesian sports goods retailer MAP Aktif Adiperkasa later this month.

The Reg S/144A fully-marketed follow-on offering, launched on Monday, comes nine months after the Indonesian company completed a $63.5 million domestic initial public offering in July last year.

Many Indonesian companies choose to sell a large stake in the form of a follow-on offering after a smaller IPO in order to avoid paying excessive taxes. These transactions are often known as a re-IPO. This time around, CVC plans to sell shares that are worth more than 5.5 times the company’s IPO proceeds last year.

The base offering comprises 648.5 million MAP Aktif Adiperkasa shares – equivalent to a 22.75% stake in the company, while CVC has the option to sell a further 6.75% stake and make a full exit if there is sufficient demand from institutional investors. CVC is offering the shares at Rp6,500 to Rp7,750 each.

At the high-end of the price range, CVC will be making an exit at a market valuation of $1.55 billion. This is about 3.9 times MAP Aktif Adiperkasa’s value of $400 million when the private equity firm bought in 2015. CVC invested $120 million in the form of a convertible bond that was later converted into a 30% equity stake.

That implies an annualised return of 97% over a four-year period – a highly impressive rate even after factoring in the Indonesian Rupiah’s 9% loss against the US dollar during the period.

The transaction marks the third major exit from CVC’s investments in Indonesia. In 2013 the private equity firm sold about 40% of Matahari Department Store for $1.3 billion through a re-IPO and subsequently sold its remaining 57% stake via multiple block trades through mid-2016.

A year later, CVC and Indonesian internet firm First Media sold their joint 30% stake in broadband and cable TV operator Link Net for $455 million.

Indonesia has been CVC’s most active markets in Asia. The PE firm also holds stakes in Siloam International Hospitals, GarudaFood and Softex Indonesia.

CVC’s success in Indonesia stands in contrast with its investments in other developed Asian markets, which has generally yielded thinner profits or even losses.

The private equity firm made its biggest-ever loss in 2012 after giving up its $1.3 billion stake in Australian TV network Nine Entertainment to settle the company’s huge debt. That was three years after CVC lost $640 million in loss-making Japanese restaurant chain Skylark.

More recently, CVC made a majority exit in Hong Kong broadband provider HKBN through a $748 million IPO in 2015, making a 24% annualised return over a three-year period.


This time around, CVC plans to make a full or majority exit in MAP Aktif Adiperkasa. It is Indonesia’s largest sports good retailer and has a 63% market share by retail value.

While operating its own sportswear brands including Planet Sports and Sports Station, MAP Aktif Adiperkasa also runs countrywide stores on an exclusive basis for international brands like Skechers, Adidas, Reebok and Puma.

Overall, the company sells more than 150 brands across sports, leisure footwear and kids segments, including 40 exclusive brands in Indonesia.

CVC is making an exit at a time when MAP Aktif Adiperkasa is ready to grow rapidly. The company intends to expand its total store area by 10% in each of the next two years – from 195,000 square meters as of the end of last year to 252,000 square meters by 2020. This will be achieved both through same-store expansion and new store launches.

MAP Aktif Adiperkasa is also prepared to expand outside Indonesia in the near future, with Vietnam as one possible destination, according to a source familiar with the situation.

Syndicate analysts expect the company’s earnings to rise exponentially on the back of these expansion plans. Its post-tax profit is expected to increase some 3.5 times from $25.5 million last year to $89 million by the end of 2020.

The company will be valued on 25.5 to 32.1 times price-to-earnings for the 2019 financial year and 16 to 20.3 times on an EV/Ebitda basis.

Institutional bookbuild for the share sale is expected to run through April 9 and settlement is set for April 15.

UBS and Deutsche Bank are joint global coordinators while Credit Suisse is a joint bookrunner and Indo Premier is a domestic underwriter.

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