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The Abraaj Group exits Thai restaurant chain Hot Pot, IPO 3x oversubscribed

19 Dec 2012

Global private equity investor The Abraaj Group has exited its stake in Thai restaurant chain Hot Pot through an IPO, which was more than three-times oversubscribed.

The firm floated more than 101 million shares on the Stock Exchange of Thailand for THB285m ($9.3m).

Abraaj bought its stake in Hot Pot though its acquisition of UK-based Aureos Capital earlier this year, creating the world’s largest private equity firm focused on SMEs in emerging markets.

Aureos invested in Hot Pot in 2006 through its Southeast Asia Fund, and has since seen revenues increase at a compound growth rate of about 25 per cent, while branches have also increased from 58 to 126 sites.

Abraaj said the initial investment had helped Hot Pot to introduce state-of-the-art kitchen and cold storage facilities, transforming its health and safety record and increasing productivity.

Omar Lodhi, senior partner at Abraaj, said, “Achieving such a heavily oversubscribed share offering in what has been a globally weak IPO market is a great result.

“It is also a good measure of the strength of the Hot Pot business that the Abraaj team helped to build.

“We made this investment on the basis that growth in South East Asia would be fast, sustainable and lead to a dramatic increase in domestic spending – not least in categories such as casual dining.”

“Working with Hot Pot’s management, our team realized that there was a very profitable opportunity to create branded restaurant chains that could take significant market share within this rapidly expanding niche.

“Six years on, the success of this IPO validates that strategy and execution plan.”

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