Pan-Asian private equity firm Olympus Capital has led an investor group including California Technology Ventures, Herostar Holdings and Grand River Capital in the acquisition of an additional $50m stake in Chinese milk producer Huaxia Dairy Farm.
Huaxia was set up in 2004 and supplies large Chinese dairy companies with milk for the production of dairy products, as well as for the production of its own brands Wondermilk and Wonderyogurt.
The deal follows the acquisition of a $45m minority stake in Huaxia in July last year by an Olympus-led investor group, which included European daily product producer Mueller Milch Management.
Olympus invested $38m in this deal, bringing its total investment in Huaxia to $68m.
Huaxia is currently in the process of expanding to meet increasing customer demand, with two new farms scheduled for completion within the next few months.
The company is also expanding its Wondermilk gelato and yogurt stores in Beijing, with the newest store now open in Houhai and five stores planned to be open by year end.
“With dairy consumption per capita in China still on the low side, but growing annually, the opportunity for growth in this sector continues to be significant,” said Huaxia founder Charles Shao.
“The expanding middle class in China will continue to drive demand for high-quality milk and milk products that are safe and traceable.”
Huaxia also announced the appointment of dairy industry veteran Jia Qi “George” Zhang, who will join the firm in the newly-created role of chief executive with effect from December 18 2012.
The deal follows reports in April that Olympus Capital has begun raising a $750m fund to target mid-market opportunities in the region.
Olympus Capital Asia IV is the same size as its predecessor, which closed in 2008.
The firm now manages three investment vehicles, two of which are dollar-denominated and one of which is renminbi-denominated, which was launched last year.
Copyright © 2012 AltAssets