EQT Partners has acquired a 40% stake in Japan Home Center, a Hong Kong-based discount houseware retailer. No financial terms were disclosed. The company’s founders will retain the other 60% stake.
EQT Greater China II (“EQT”) has acquired a co-control stake in the leading discount house-ware retail chain, Japan Home Centre, based in Hong Kong. EQT has a 40% ownership in Japan Home Centre while the two founders, Peter Lau and Lisa Ngai, have together retained a 60% stake. Japan Home Centre is the largest discount house-ware retail chain in Hong Kong with more than 200 directly owned stores. In addition, there are approximately 80 overseas franchised stores in the Philippines, Malaysia, Dubai, Australia and Saudi Arabia.
Japan Home Centre was established in 1991 by the two founders. It targets primarily the general “Home and Living” market with plastic-ware and housekeeping products as signature categories. The core strategy is to offer high-quality, value-for-money products. In fiscal year 2009 Japan Home Centre had sales of more than USD 100 million.
“Japan Home Centre has an impressive track record of consistent revenue and profit growth and strong cash flow generation. The founders have built a very strong platform for further growth. We look forward to working together with the founders to continue expanding and improving this business in Hong Kong and overseas where we believe EQT’s capabilities and network can play an important role”, said Fredrik Åtting, Senior Partner at EQT Partners in Hong Kong.
“This investment fits very well with EQT’s investment strategy. We believe that our local presence and understanding of the core markets together with EQT´s broad network of high caliber industrialists world-wide will be helpful for the management team to drive expansion both in local markets and overseas”, said Martin Mok, Partner at EQT Partners in Hong Kong.
EQT and the founders intend to pursue growth in overseas markets, while further penetrating the Hong Kong market with further store openings. There is also potential to increase sales in existing stores and enhance operational performance including margin improvement. The management team, which includes the two founders, will continue to manage the business.
“We are very pleased to welcome EQT as an owner in Japan Home Centre and together I am convinced we can take the company to a new level. The access to EQT’s expertise and network will be key in this ambition”, said Peter Lau, CEO of Japan Home Centre and co-founder.
The general investment approach within the EQT funds is to acquire high-quality, market-leading, mid-sized companies in growing industries with a clear top-line growth potential. Greater China, with its increasing consumption trend and strong economic growth, offers many interesting investment opportunities. There are many situations where an active private equity owner such as EQT can develop the companies further. EQT has an extensive global network of senior advisors with deep knowledge and experience that can contribute to the invested companies’ industrial acceleration.
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EQT Greater China II is one of a group of private equity funds that has raised approximately €13 billion in equity commitments across 12 funds. EQT Partners, acting as investment advisor to all EQT funds, has offices in Stockholm, Copenhagen, Helsinki, Frankfurt, Munich, Oslo, Zurich, New York, London, Warsaw, Shanghai, Singapore and Hong Kong. EQT funds realise their business concept by acquiring, financing and developing high-quality medium sized companies in Northern and Eastern Europe, North America and Asia. EQT serves as an active owner and works in close co-operation with the management of the companies it acquires, to develop and implement value-enhancing strategies. In total EQT funds have invested in approximately 80 companies.
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