Dive Brief:
- Private equity giant KKR has completed an exit from China Modern Dairy. KKR became involved with the company in 2008 alongside fellow private equity firm CDH Investments.
- KKR said it sold its last remaining shares in China Modern for $80 million. KKR and CDH had cashed out the majority of their holdings in China Modern for $410 million last year.
- The move comes as China Modern completes a remarkable turnaround. Sales in the most recent quarter rose 51.6%.
Dive Insight:
Private equity seems to be doing quite well in China's food industry. And that's not surprising. Unlike in North America, where private equity's game plan is limited largely to cost cutting, there's much that the investors bring to the table in China—particularly access to modern food-production and food-safety techniques.
KKR is the leader here. Just before it completed its exit of China Modern, it bought a stake in China's largest chicken processor. And the day before that deal was announced, New Zealand's Fonterra said it would invest a half billion in China's Beingmate, a maker of infant formula. Among the investors in that deal is private equity fund CICC Capital.
