Actis sells stake in Chinese hotpot brand Xiabu Xiabu to General Atlantic


Emerging market investor Actis has exited its stake in Chinese bar-style hotpot brand Xiabu Xiabu to fellow private equity firm General Atlantic.

The London-headquartered firm bought a majority stake in Xiabu for $51m in 2008, and has expanded the business from 60 restaurants in two cities to 300 across the country.

A spokeswoman for Actis said she could not comment on returns from the investment.

Actis senior partner Paul Fletcher said, “Under the leadership of Mr Ho and the management team, Xiabu Xiabu has grown from a regional catering company into one of the most influential catering brands in China. Their success is widely recognized.

“We are proud of being Xiabu Xiabu’s partner in the first round of investment, and we have huge confidence in the Company’s future development.”

Dr Pei Liang, secretary-general of China Chain Store & Franchise Association, said, “Over the past two years, the scale and profitability of Chinese catering businesses have faced challenges as labour, raw material costs and leases continue to rise.

“Despite all these, Xiabu Xiabu has been able to maintain rapid growth in its revenue and profit as it continues to attract investors.”

Actis said consumer investment in China continued to be highly attractive thanks to rising discretionary spend and strong demand for branded goods and services.

It said the Xiabu Xiabu sale followed in the footsteps of exits including Mo’men in Egypt and Mr Biggs in Nigeria.

The firm also has a current investment in kitchen equipment supplier EIC and Taiwanese casual dining restaurant Bellagio.

Actis, one of the earliest foreign private equity firms to enter the Chinese market, has almost $1bn at work.

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