Tue, Sep 18, 2018 - Page 11 News List

KKR to sell oldest Asian Investment

Bloomberg

KKR & Co has agreed to sell Singapore hard-drive component maker MMI Holdings Ltd for about US$645 million including debt, people with knowledge of the matter said, exiting the oldest Asian investment listed in its portfolio.

KKR signed a deal to sell MMI, which it has owned for 11 years, to a Chinese buyout group led by an affiliate of Beijing HBH Innovation Industry Fund (北京翰百赫), the people said.

Cybernaut Investment Group (賽伯樂), a private equity firm started by WebEx Communications Inc cofounder Min Zhu (朱敏), is also part of the consortium, the people said, asking not to be identified because the information is private.

The buyout firm is to generate a return of about 1.6 times its initial investment in MMI, including the dividends it collected during the holding period, one of the people said.

The Chinese investor group is purchasing MMI’s holding company for about US$245 million in equity and would assume about US$400 million of debt, the people said.

Any transaction would add to the US$38.3 billion of announced Chinese acquisitions in Singapore over the past three years, according to data compiled by Bloomberg.

KKR is selling the business as increasing use of mobile devices suppresses demand for traditional storage solutions.

Members of MMI’s management team have plans to reinvest in the company with the Chinese consortium, one of the people said.

KKR expects to complete the sale in one to two months after receiving pending regulatory approvals, the people said.

A representative for KKR declined to comment.

Representatives for MMI, Beijing HBH and Cybernaut did not immediately respond to requests for comment.

MMI makes and ships more than 26 million high-precision parts for computer hard disk drives weekly, its Web site showed earlier this year.

The company has design centers and manufacturing facilities in China, Malaysia, Singapore and Thailand, according to the Web site, which has since been taken down and now shows an “under construction” notice.

Other Singaporean companies in KKR’s portfolio include Goodpack Ltd, a provider of bulk containers it acquired for S$1.4 billion (US$1 billion) in 2014, and Mandala Energy Ltd, a Southeast Asia-focused oil and gas exploration and production firm founded in 2015.

KKR sold Singapore-based Unisteel Technology International Ltd — which makes precision-engineered components— to SFS Group AG in 2012.

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