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Carlyle, investors sell China’s Babela restaurant chain for $40m

1 Feb 2012

Global private equity major Carlyle and two undisclosed investors have sold their stakes in Chinese restaurant chain Babela to Unitas Capital, a Hong Kong buy-out firm, for $40m.

Carlyle initially invested in the company in July 2007 through its Asia Growth Partners III vehicle. Financial terms of the deal were not disclosed at the time.

Babela is an Italian-themed casual dining chain of more than 120 stores in Shanghai and Beijing, as well as in tier two and tier three cities. The firm also operates under the Bamboo Bifengteng brand, a Cantonese style casual dining chain in Shanghai and Beijing, and the Aha! brand, a Taiwanese-style dessert chain.

Unitas will work in partnership with the company’s founder, Chen Xing Wei, who will retain his existing stake in the business. Unitas Partner Jay Lee is a former senior executive of global quick service restaurant giant Yum!, and will be working with Chen Xing Wei and the management team to grow the business through acquisitions of other restaurant brands in China.

Eugene Suh, a partner and COO of Unitas Capital, said, “We are strong believers in the growth potential of the chained restaurant space in China and have the unique capability to directly improve and grow brands with our in-house operating capabilities.

“We’ve been searching for the right company to use as a platform for further growth in this space and have found the right company in Babela’s Group and the right partner in Chen Xing Wei,” he added.

Unitas manages over $4bn of assets and is focused on investing in the consumer and retail industries, as well as in the industrial manufacturing space.

Carlyle has also edged one step closer to realising its largest ever cash exit after selling 18 million shares in China Pacific Insurance, after reducing its stake to less than five per cent last month.

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