Vietnam’s Masan Group is in discussion with international investors over an equity funding round that may raise up to US$500 million, subject to prevailing market conditions and the group’s capital needs.

Bain Capital has agreed to invest at least US$200 million in equity capital at 85,000 dong (US$3.5) per share. This marks the Boston, Massachusetts-headquartered private equity firm’s first-ever investment in Vietnam.

Proceeds from the deal will be used to strengthen Masan’s financial position and delever its balance sheet.

Masan says the transaction underscores Bain’s confidence in its ability to realize the immense opportunity to meet the Vietnamese consumers’ daily food and financial requirements, among other needs.

“In the face of a challenging consumer environment, Masan has continued to invest in our platform and breakthrough innovations to position ourselves for the consumer upswing. We aim to be a profitable multiplier on Vietnam’s golden consumption era,” says Masan Group chief executive officer Danny Le.

“Bain Capital’s partnership is a strong validation of all the consumer-centric investments and transformation we have made over the past 18 months to win 80% of the consumer wallet,” he adds.

Integrated platform

Masan has been transforming from a pure branded products company into an integrated consumer-retail platform to consolidate the growth potential across the consumer value chain.

The conglomerate has identified three multi-year growth trends, namely “premiumization” and health-led innovations, served by its fast-moving consumer goods business Masan Consumer Holdings; transition from unbranded to branded and increasing demand for higher-quality animal protein, provided by Masan MeatLife; and shift from general trade to modern trade through its retail platform WinCommerce.

“Masan is one of the most trusted brands in Vietnam with significant reach to households with the ability to anticipate consumer tastes and build out an innovative product pipeline to meet those needs. We see a significant opportunity to invest behind Masan’s continued growth and first-class management team,” says Bain Capital partner Barnaby Lyons.

Bain Capital has been investing in a diversified set of consumer and retail businesses in Asia, including Schwan’s Company and Carver Korea.

Masan expects the transaction with Bain to close by the end of 2023. The group says it is also exploring other strategic alternatives for equity capital, including diluting its interest in non-core businesses, to bolster its liquidity profile and achieve a sustainable net debt to EBITDA ratio below 3.5x.

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