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|MEF II divests MWG after 10.5 years for a 57x cumulative return on investment|
This was the culmination of an exit process that began with a pre-listing private placement shortly before the 2014 public listing of MWG on the Ho Chi Minh City Stock Exchange, and involved gradually selling blocks of shares to institutional investors approximately once per quarter after the listing. The final five million shares were sold at a price of VND165,000 per share and was completed on January 29, 2018.
MEF II originally invested $3.5 million in MWG for a 35 per cent stake in 2007. The cumulative net proceeds from the sale of MEF II’s MWG shares and dividends received was $199.4 million. Over the 10 years and a half of holding period of this investment, it generated a return multiple of 57x in USD and an IRR of 61.1 per cent, making it one of the most successful private equity investments in the history of Asian Private Equity.
When MEF originally invested into MWG in 2007, the distributor had seven stores and a $10 million company valuation. At that time, it set the goal to increase to 50 stores and a $50 million company valuation.
Chris Freund, general director of Mekong Capital, said: “It is unfortunate that we now must complete our 10.5-year journey together with MWG. Our fund—MEF II that invested into MWG—was launched in 2006 and ultimately had a 12-year term, hence we needed to complete the divestment of our remaining investments in MEF II, including MWG, in the first few months of 2018.”
During its 10.5-year holding period by MEF II, MWG has grown from seven stores to over 2,000 stores today under four different retail brands: thegioididong.com, Dien may XANH, Bach hoa XANH, and vuivui.com. The company has also recently acquired Tran Anh Digital World and the Phuc An Khang pharmacy chain.
|MWG and TAG opened doors for further M&A
Acquiring Tran Anh (TAG) is expected create additional diversity in the operations of Mobile World Group (MWG), while the M&A deal between the two largest local electronic retailers also opens expectations for further M&A deals among competitors in the sector.
|Despite healthy performance, foreign funds divest MWG
After a strong rally of 30 per cent in stock price over the past four months, Mobile World Group (ticker MWG) saw back-to-back divestments from numerous of foreign funds.
|MWG to spend $110 million acquiring electronics and pharmaceutical store chains
Mobile World Investment Corporation (MWG) plans to spend VND2.5 trillion ($110.3 million), five times as much as the initial figure planned for mergers and acquisitions activities this year, to acquire a number of electronics store and pharmaceutical store chains this year, according to newswire Vnexpress.