MBK takes bite of Godiva’s Asia-Pacific business

The north Asia private equity firm has spread its reach southwards to purchase Asia-Pacific assets from Godiva Chocolatier’s owner Yildiz Holding.
Yildiz Holdings bought Godiva from Campbell Soups in 2007
Yildiz Holdings bought Godiva from Campbell Soups in 2007

Private equity firm MBK Partners has won an ultra-competitive bidding process for the Japan, South Korea, Australia and future New Zealand operations of Belgium-based premium chocolatier Godiva.

According to sources close to the deal, MBK fought off a mixture of global and Asian-based private equity firms to close the transaction at the last minute.

Whilst terms have not been formally disclosed, recent estimates put the size of the deal in the $1 billion to $1.5 billion bracket.

“We have long treasured the Godiva brand and believe it represents significant upside for any investor,” said Nurtac Afridi, head of strategy and M&A for Yildiz Holdings, which owns Godiva.

Included in the deal is Godiva’s production facility in Brussels that supplies these markets. That negates the need for a separate supply agreement with Godiva.

The deal also includes consumer packaged goods, digital-commerce, travel retail (for Japan and South Korea) and more than 300 retail stores in the four countries.

Since Turkish conglomerate Yildiz Holdings purchased Godiva from Campbell Soups in 2007 for $850 million, revenues have nearly doubled from almost $500 million in 2008, according to the statement from Godiva.

WIN WIN?

MBK invested in Japan’s Komeda Coffee chain in 2013 for a reported $388 million, exiting in June 2017 for a five times profit, according to data from AVCJ. The success of that investment is one reason for its interest in the most recent deal.

Godiva chief executive officer Annie Young-Scrivner revealed that funds from the sale will be used to grow the business in new and existing markets, including the building of 2,000 cafés globally.

The company already has 40 outlets globally, after launching the café business in Istanbul and Shanghai in 2010.

And the coffee shop business has seen a raft of big-money deals by consumer companies recently.

Last year Coca-Cola bought out Britain’s Costa Coffee for $5.2 billion and Nestlé paid $7.15 billion for the perpetual rights to sell Starbucks products outside of the U.S. company’s coffee shops.

The global coffee shop market alone is worth $165 billion, according to Nielsen estimates.

Through this deal, MBK is likely to benefit from the synergies created by Godiva's brand recognition in the four markets.

TRACK RECORD

In 2016, MBK bought Doosan Infracore’s machine tool business for $950 million. In partnership with TPG Capital, MBK has also acquired Wharf T&T, the telecom business of Hong Kong’s The Wharf Holdings, for $1.2 billion.

Its biggest deal to date was the $6 billion it paid for Homeplus, Tesco’s Korean discount retail chain in 2015.

In 2017 it bought Japan’s Takashi Jewelry and the company’s management for $283 million, having previously invested and successfully exited the business between 2008 and 2015.

Getting a foothold back in the lucrative coffee shop business could now well prove to be the icing on the cake for the private equity firm.

Deutsche Bank acted as sole financial advisor and Anderson Mori & Tomutsune as the legal counsel for MBK. Morgan Stanley was sole financial advisor and Baker McKenzie provided legal counsel to Yildiz Holding and Godiva. The deal is expected to close in mid-2019.

¬ Haymarket Media Limited. All rights reserved.

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