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Private equity

Bain Capital to gain $90 mn from exit of Schwan's deal

CJ Cheiljedang is set to buy Bain Capital's stake in US arm for $438 mn

By Jun 17, 2021 (Gmt+09:00)

1 Min read

Bain Capital to gain  mn from exit of Schwan's deal
Bain Capital is set to pocket about 100 billion won ($90 million) in profits in two years from its equity financing of the South Korean CJ Group's $1.84 billion acquisition of Schwan's Company, a US frozen food firm.  

Back in 2019, the US private equity firm had injected 390 billion won in exchange for a 27.14% stake in CJ Food America Corp. which took over Schwan's on behalf of the parent CJ Group. The transactions marked CJ Group's largest-ever overseas acquisition.

Bain Capital is now selling its whole stake in CJ Food America for $438 million, or 489.6 billion won, CJ Cheiljedang said on June 16.

CJ Cheiljedang is buying the stake in cash, which it will be raising through a rights offering of CJ Foods America Holdings Corp., according to the company's regulatory disclosure.

"In order to buy the 27.14% stake held by BCC Swan LP (hereafter, the financial investor) in CJ Foods America Corp. at a price of $438 million, our company is issuing new shares in CJ Foods America Holdings," it said in the filing.

It plans to complete both the rights offering and the stake purchase from Bain Capital on July 15 of this year.

CJ Cheiljedang, a popular K-food brand for Asian dumplings, noodles and other processed food, had acquired Schwan's Company to accelerate its foray into the world's largest proceessed food market.

Minnesota-based Schwan’s, founded in 1952, specializes in frozen foods such as pizza, pies and appetizers.

"It was a successful deal for both CJ Cheiljedang and Bain Capital. CJ reduced its financial burden on the billion dollar acquisition by bringing in Bain Capital as a financial investor, while Bain is walking away with handsome gains," said an investment banking source.

Earlier this year, Bain Capital took over a 10% stake for around 400 billion won in South Korea’s leading enterprise resource planning software developer Douzone Bizon Co. to become its second-largest shareholder.

Write to Jun-ho Cha at chacha@hankyung.com
Yeonhee Kim edited this article.
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