Vietnamese conglomerate the Masan Group announced that it has secured funding of at least $200 million from Bain Capital, one of the world’s leading private investment firms with approximately $180 billion in assets under management.
The investment will be in the form of Convertible Dividend Preference Shares (CDPS) issued at a price of VND85,000 ($3.5) per share, which can be converted into ordinary shares at a 1:1 ratio. Masan is also in discussions with other investors to secure investment totaling $500 million, which will be subject to prevailing market conditions and the company’s capital needs.
According to a Masan statement, the proceeds will be used to strengthen the company’s financial position and de-leverage its balance sheet.
This marks Bain Capital’s first-ever investment in Vietnam and underscores its confidence in Masan’s ability to realize the immense opportunity to fulfill 100 million Vietnamese consumers’ daily grocery, financial, and life needs.
Commenting on the transaction, Mr. Danny Le, CEO of Masan Group, noted that in the face of a challenging consumer environment, Masan has continued to invest in platform and breakthrough innovations to position itself for the consumer upswing. “We aim to be a profitable multiplier in Vietnam’s golden consumption era,” he said. “Bain Capital’s partnership is strong validation of all the consumer-centric investments and transformations we have made over the past 18 months to win 80 per cent of the consumer wallet. We look forward to working with Bain to accelerate our vision to be a one-stop shop for daily consumer needs.”
Mr. Barnaby Lyons, Partner at Bain Capital, believes that Masan has the right fundamentals, reach, and growth strategy to succeed in a high-growth and compelling consumer market. “Masan is one of the most trusted brands in Vietnam, with significant reach to households and the ability to anticipate consumer tastes and build an innovative product pipeline to meet those needs,” he said. “We see a significant opportunity to invest behind Masan’s continued growth and first-class management team.”
Vietnam is the fastest-growing consumption market in Southeast Asia, with forecast annual growth of 7.7 per cent between 2022 and 2040, underpinned by increasing urbanization and an exploding consumer class with higher disposable incomes and evolving demands extending beyond basic needs to lifestyle and financial wants. As a leader in Vietnam’s consumer market, Masan has been transforming from a pure branded products company into an integrated consumer-retail platform to consolidate the growth potential across the consumer value chain.
It expects that the transaction will be completed in 2023 and it will continue to seek other strategic equity solutions, including reducing the proportion in non-core business and increasing liquidity.