Bain Capital to invest additional $50 million in Masan Group

In just two months, the leading private investment firm with approximately $180 billion of assets under management, augmented its investment to $250 million.

Transaction terms remain the same as per the initial agreement in October 2023. The proceeds will be used to strengthen the Company’s financial position and allocated to de-lever Masan’s balance sheet.

Despite recent market volatility, the upsize of the transaction by Bain Capital is a strong validation of Masan’s long-term strategy and near-term outlook on the back of operating momentum in the third quarter of 2023.

The combined operating profits of Masan’s consumer-retail businesses grew by 45.5% and 47.3% year-over-year in 9M2023 and 3Q2023, respectively. Free cash flow consistently improved, reaching VND2,202 billion in 3Q2023, compared to VND125 billion in 3Q2022, driven by more effective working capital management.

According to Kantar Worldpanel, in 3Q2023, FMCG markets only recorded 6% YoY growth in four urban key cities in Vietnam and 7% YoY growth in rural areas. Meanwhile, on a LFL basis, Masan Consumer Holdings’ revenue grew 9% YoY and EBITDA grew 20% YoY in 3Q2023. Management expects Masan Consumer Holdings’ operating profit to continue its double-digit growth in 4Q2023.

In November 2023, after a period of format innovations and efforts to enhance operational efficiencies, WinCommerce started to deliver improvement in daily store revenue with YoY LFL growth approaching positive areas versus a decline of 10% YoY in 1Q2023.

The current momentum gives management confidence in positive LFL growth for the month of December, which will support the overall profitability profile of WinCommerce.

The Transaction is an equity investment in the form of Convertible Dividend Preference Share to be issued at a price of VND85,000 per share which can be converted into ordinary shares at a 1:1 conversion ratio.

In addition to the normal dividends payableto the Company’s shareholders, the CDPS has no preference dividend for the first five years, then followed by a 10% preference dividend at par value of each outstanding CDPS per annum from the sixth anniversary onwards. On the tenth anniversary of the issuance, the outstanding CDPS will be mandatorily converted into ordinary shares of Masan Group.

There are no hedging structures or stock borrow of MSN shares as part of the equity investment that would result in MSN shares needing to be sold in the open market at the date of the issuance. Bain Capital’s interests are fully aligned with current MSN shareholders.

Jefferies Singapore Limited and UBS AG Singapore Branch acted as the financial advisors to Masan Group. The transaction is subject to customary corporate and regulatory approvals.

Masan expects the transaction to close in the next few months and continues to explore other strategic alternatives for equity capital, which may include diluting its interest in non-core businesses, strengthening its liquidity profile and achieving a sustainable Net Debt to EBITDA ratio below 3.5x on a steady-state basis.