Everstone Capital along with Verlinvest has offered to buyout Singapore Exchange listed Harry's Holdings Ltd for up to S$21.85 million (Rs 98 crore or $17.85 million). The Harry’s Group owns and operates a chain of premium lifestyle bars under the brand name Harry’s and also various themed restaurants cum bars under the names Mirchi – Taste of India, Marrakesh Moroccan Lounge & Bar and The Rupee Room.
The Harry’s Group is also licensed as franchisee to operate O’Brien’s sandwich bar in Singapore, operates a boutique hotel, The Club in Singapore and also provides catering services for corporate functions, social events and large-scale external events. It also owns and operates centres providing interactive play and music programmes to children in Singapore and Malaysia, as a franchisee of the Gymboree Play Programs Inc.
Everstone Capital has bid through a special purpose vehicle F&B Asia Ventures Ltd, a subsidiary of Everstone Capital Partners II LLC. The firm has made a voluntary conditional cash offer for all the issued and paid-up ordinary shares of Harry's Holdings at S$0.23 per share to take the firm private.
Everstone will be co-investing in the SPV with Verlinvest S.A., a Belgian family holding company dedicated to private equity investments in the consumer sector, which is also a limited partner of Everstone.
The offer price of S$0.23 per share is at a premium over Harry’s IPO price of S$0.22 per share when it went public in January 2011 as well as its peak historical traded price of S$0.22 per share since listing.
The offer price also represents a premium of 53 per cent over the last traded price of $0.150 prior to the announcement of the offer last Friday and a premium of 80 per cent over the average closing price for the six-month period preceding the date of the offer.
Mohan Mulani, the founder and executive chairman of Harry’s, and his wife Rita Mulani, have given irrevocable undertakings to accept the offer for their combined holding of 45.91 per cent of Harry’s.
JM Financial Singapore Pte Ltd advised Everstone on the transaction.
For Everstone, this deal would extend its exposure to the F&B space. It had previously picked large stakes in firms like JS Hospitality (Pind Balluchi among other brands) and Pan India Food Solutions (Copper Chimney, Spaghetti Kitchen, The Coffee Bean etc) in the restaurant business.
The fund, which has assets under management of approximately $1.8 billion, is now looking to expand its network of food and beverage businesses outside India and in particular in South East Asia.
Everstone’s managing partner, Sameer Sain, said in a disclosure statement: “We believe that Harry’s, with its well established brand and strong network of premium lifestyle bars and themed restaurants, as well as its catering services business, is a suitable platform for Everstone in the region.”
The offer is subject to receiving valid acceptances so that the PE firm picks at least 50 per cent stake in the firm (including the stake to be acquired from the key shareholders).
Harry's is listed on Singapore Stock Exchange's sponsor-supervised listing platform Catalist. Catalist's regulatory regime offers a faster and simpler way to raise capital.
(Edited by Prem Udayabhanu)