Goldman, Whitesun invest $30m in café chain in China

Goldman has again teamed on a growth equity deal with Whitesun, a China-focussed private equity firm led by Taiwanese rainmaker Benny Hu.

Goldman Sachs and Whitesun Equity Partners have made a $30 million (€19 million) growth equity investment in C.Straits Food Chain, a Western-food café chain with 400 directly owned and franchise locations across China.

Benny Hu

Financial terms were not disclosed, though C.Straits said it will work with Goldman and Whitesun to expand the chain to 1,000 stores. It already has an agreement with Kai Yuuan Hotel Group to open upscale hotels with dining services provided by C.Straits, it said.

The company said it will add representatives from Goldman and Whitesun to its board, though it did not say how many.

David Chou, a Goldman managing director, said in a statement that China’s catering industry has “huge growth potential given Chinese consumers’ increasing per capita income”. The investors will help the chain increase its footprint with an aim towards going public, he said.

Goldman teamed with Whitesun in 2007 on a $52 million investment in Yuema International, a Chinese industrial paper business, ahead of its public listing.

Whitesun provides growth capital to tech and consumer companies in China and is led by Benny Hu. At various times the president, chairman and executive director of Tawain’s China Development Industrial Bank, Hu was between 2001 and 2004 the chairman of Hwa Lone Star Asset Management, a joint venture formed between US-based Lone Star Group and CDIB targeting distressed Taiwanese investments.

In 1986, Hu founded China Securities Investment Trust, a joint venture between CDIB, Fidelity Investments, Merrill Lynch, Yamaichi Securities, and Bangkok Bank. It was sold to HSBC in 2001 for $200 million, leading to a return of 65 times invested capital for founding shareholders, according to Whitesun’s website.