Idea Thrive sells for $84 million

Convenience-store chain Idea Thrive is being acquired by investment holding company China CVS, a stock exchange filing reveals.

The move is expected to lead to an expansion of the chain in Hong Kong and China’s mainland, with the injection of not just capital, but industry knowledge as well.

China CVS has been jointly formed by Hong Kong-listed Greentown Service Group, Xianlife and ExFresh to finance the acquisition. China CVS is offering an aggregate consideration of US$84 million to Idea Thrive shareholders, the filing shows.

A senior manager at Idea Thrive, Tao Ye, and his investment holding company Wesell are a partner in the China CVS joint venture, Deal Street Asia reports.

Morgan Stanley Private Equity Asia (MSPEA) is the majority owner of Idea Thrive, which runs convenience stores in China and Hong Kong under the Hao Lin Ju brand. MSPEA reportedly bought a 72 per cent stake in the company from China Financial Services Holdings in November 2012, and will fully exit its shareholding once the present transaction closes.

“The aggregate amount of capital injected into China CVS by its shareholders upon the second closing is $30 million, and China CVS shall procure the remaining the portion of such consideration through debt financing,” the filing says.

Incorporated in the Cayman Islands 20 years ago, the convenience-store chain serves nearly a million people a day.

Greentown Service, which holds a 35 per cent stake in China CVS, is a high-end residential-property service provider on the mainland. Xianlife is a China-based full-channel new retail company, while ExFresh is a fresh-food online retailer in China.

According to the filing, the investment in China CVS will allow Greentown Service to benefit from the knowledge and experience of Xianlife and ExFresh in the retail industry, while Idea Thrive will gain a better chance to grow its business.

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