KUALA LUMPUR (Sept 12): Private equity firm Creador Sdn Bhd has signed an agreement with CCK Consolidated Holdings Bhd (KL:CCK) for a RM163.1 million investment to acquire a 40% stake in the poultry company's Indonesian unit, PT Adilmart Tbk.

This is slightly lower than the initial investment proposed by Creador of RM170.3 million, when the deal was announced back in May.

In a filing on Thursday, CCK announced that it had entered into definitive documents, which include a conditional share purchase and subscription agreement with Astrantia Sdn Bhd, a special-purpose vehicle set up by Creador for the acquisition.

Under the agreement, Astrantia’s acquisition will involve both the purchase of existing shares from CCK and the subscription to new shares, divided into three tranches.

The first tranche involves acquiring a 26.5% equity interest in Adilmart for a total consideration of RM88.1 million.

The second and third tranches, which involve share subscriptions, will cover the remaining RM75 million.

“The proposed disposal will enable the group to raise RM88.1 million, strengthening its financial position and providing flexibility to pursue business opportunities, fund working capital, and reward shareholders,” CCK said in the bourse filing.

The company also noted that the share subscription will provide Adilmart with additional funds for growth and reduce reliance on costly debt financing.

In a statement, Creador’s country head of Malaysia and executive director Livia Chan said that the private equity firm is excited to partner with PT Adilmart, whose profit has grown at a 50% compounded annual growth rate over the last five years.

“Our focus will be on expanding its production capacity and accelerating its distribution coverage across new regions in Indonesia,” said Chan.

CCK has a leading position in the fresh mart retail industry in East Malaysia with 73 stores. It ventured into the Indonesian frozen food business in its early years and has established a strong brand presence in Kalimantan and Central Java.

CCK’s group managing director John Tiong said that the group will leverage Creador's experience in the consumer sector, as well as its own entrenched distribution network in Indonesia, to accelerate its growth strategy.

“With the upcoming commissioning of our third facility, we are well-positioned to meet increasing market demands,” he said.

Since 2011, Creador has invested in four unicorns in Indonesia, namely Mr DIY Indonesia, Cimory, BFI, and Hermina. This acquisition is a significant milestone for Creador, marking its 55th investment since inception and reaffirming its commitment to the Indonesian market.

CCK closed 1.11% higher on Thursday at RM1.82, valuing the group at RM1.15 billion. Year to date, the counter had rallied by 121.95%.