A 35.95% stake of Golden Gate, the operator of a leading restaurant chain in Vietnam, has been sold to a group of three Singaporean investors, while major shareholder Prosperity Food Concepts Pte Ltd said “good bye” to the company.
Golden Gate on Thursday sent a report to Vietnam’s State Securities Commission, and announced the transaction.
Accordingly, the 32.92% shareholding of Singaporean-backed Prosperity Food Concepts and a 3.03% stake owned by Golden Gate’s two co-founders will be handed over to the new investors, namely Temasek, Seatown Private Capital Master Fund and Periwinkle Pte Ltd.
An M&A expert said this is an important merger and acquisition (M&A) transaction for Golden Gate and the Vietnamese market. “Given that many food and beverage (F&B) businesses and restaurants have closed or gone bankrupt due to the Covid-19 pandemic, the deal could be viewed as a sign that Vietnam’s F&B sector is still thriving.”
Hoang Quoc Khanh, Director of Operations at Golden Gate said the total transfer value was not disclosed under the parties’ agreement. “However, the fact that three major Singaporean investors chose Golden Gate to invest amid the Covid-19 outbreaks in Vietnam demonstrates the company’s high development potential.”
According to International Investment Valuation and Consulting JSC, a Golden Gate share was priced at over VND1.95 million ($85) on August 30, 2021, equivalent to a market capitalisation of about VND14.85 trillion (about $649 million). Therefore, Singaporean investors could have to shell out about $234 million for a nearly 36% stake in Golden Gate.
The new group of shareholders will join Golden Gate’s board of directors and assist the company in developing business strategies and establishing a modern corporate governance system in accordance with global standards, Khanh said.
“There are numerous reasons why Golden Gate attracts these investors' interest. When the pandemic was raging, the company responded extremely quickly to the adverse circumstances. As Vietnam is to reopen its economy, the growth potential of the F&B industry, particularly Golden Gate as the market leader, is quite positive,” he added.
During the pandemic, Golden Gate focuses on care programs, incentives for close members, and improving customer experiences with The Golden Spoon app. The company also promoted the development of online sales channels through the G-delivery and Icook as well as integrating forms of payment through e-wallets and cards etc. to assist customers in ordering its products and enjoying at home, especially during the period when the restaurant chain is forced to close due to social distancing orders.
Despite the fact that the company's restaurant chain had to close 35% of the working days in 2021, Golden Gate still earned VND3.32 trillion ($145.1 million) last year, equivalent to 73% of its revenue in 2020.
One of the largest F&B firms in Vietnam, Golden Gate now operates over 400 restaurants across 40 cities and provinces, including numerous well-known culinary brands, mostly for hotpot and grilling, such as Kichi-Kichi, Gogi, Sumo BBQ, Manwah and Hutong.
Temasek, one of Golden Gate’s new investors, had a total asset portfolio of $283 billion by the end of March 2021, with Asia’s investments accounting for 64%. In Vietnam, the Singaporean government-owned investment company has made long-term investments in a number of companies such as VNG, Scommerce and Vinhomes. Golden Gate is one of the F&B enterprises of Vietnam receiving the high-profile company’s investments.