CVC in $774m debut Indonesian deal

The private equity firm has taken a joint 91% interest in publicly traded Indonesian retailer Matahari Department Store.

CVC Capital Partners has teamed with Indonesian retailer Matahari Putra Prima on its first Indonesian deal: the purchase of 90.76 percent of its department store chain Matahari Department Store for about IDR7.2 trillion ($774 million; €547 million).

The purchase will be made from a  IDR8 trillion joint venture, known as Asia Meadow, established between the private equity firm and the retailer. Jakarta-headquartered Matahari Putra Prima currently holds an approximately 20 percent stake in the joint venture, according to a company statement. It has an option to purchase an additional 10 percent stake, according to Bloomberg

Matahari: CVC's first Indonesian deal

The holding in Matahari Department Store was acquired for IDR2,705.33 per share, the Matahari Putra Prima statement said. No further details of the transaction were disclosed, although according to several media reports Asia Meadow plans to acquire the outstanding shares from shareholders in the near future.

Matahari Department Store is one of nine business lines belonging to Indonesian retailer Matahari Putra Prima, which is controlled by Indonesian conglomerate Lippo Group, and currently operates 88 stores. The capital from the transaction will be used to roll out more than 150 new stores in the next 10 to 15 years, the company statement noted.

Following news of the deal, Matahari Putra Prima’s shares saw a sharp increase to IDR1120 on 25 January, from IDR1010 the week before.

Private equity players have been stepping up their investments in Indonesia, Southeast Asia's largest economy, in the past six months. In November 2009, TPG affiliate Northstar Pacific Partners acquired a 40 percent stake in mining contractor Delta Dunia Makmur in a deal estimated to be worth between $350 million and $400 million.

In October 2009, Beijing-based Hopu Investment Management bought a 4.9 percent stake in Lippo Karawaci, the largest real estate developer in Indonesia, for $45 million, according to the Financial Times.

CVC Asia Pacific, the firm’s Asian arm, is currently investing out of CVC Capital Partners Asia Pacific III, which closed on $4.1 billion in April 2008. This is the firm’s first fund since ending a joint venture with former banking parent Citi and it invests in Australia, Greater China, Hong Kong, Japan, Singapore and South Korea

CVC was not available for comment at press time.