A controlling stake in Chinese hot pot chain Xiabu Xiabu is for sale for US$150 million, triple the value of the initial investment.
Xiabu Xiabu was founded in Beijing in 1998. It has 240 restaurants across the mainland. UK private equity firm Actis bought the hot pot chain from Xiabu Xiabu Catering Management for US$50 million in 2008.
Now, Actis wants to cash up its investment in Xiabu Xiabu and is now looking for a majority stake holder.
“For Actis, it’s proved to be a good investment and now the question is how much it can sell to the next buyer,” said one person who was approached by Actis regarding the sale of the stake.
The sale, in its early stages, is being handled by investment banks hired by Actis.
When Little Sheep – a competitor of Xiabu-Xiabu – went to Yum! Brands, the US fast-food owner of Pizza Hut and KFC, its original investors Prax Capital and 3i Group also experienced a tripling of their original investments.
“I think the Little Sheep deal has set a benchmark there for other similar Chinese restaurant deals in the future. The new buyer of Xiabu Xiabu can either list the company or sell it to a foreign company like Yum! Brands,” said one of the sources.
GB
