KUALA LUMPUR (Oct 10): Ekuiti Nasional Bhd (Ekuinas) has announced the divestment of its entire equity interest of 60% in homegrown desserts and beverage company Coolblog Apps Sdn Bhd to private equity firm Archipelago Capital Partners. 

Ekuinas did not reveal the price tag of the stake in its statement, saying only that the divestment was “based on the equity value of RM75.0 million”.    

The government-linked private equity fund management company added the divestment of the stake, which it had bought in 2014, has generated an internal rate of return (IRR) of 6.4% with a money multiple of 1.4 times the capital invested.   

“Our investment in Coolblog has reached its maturity for divestment and we have implemented our value creation plan. It is also part of our careful investment strategy to secure positive IRR, in line with our move to crystallise our assets under Ekuinas Direct (Tranche II) Fund,” Ekuinas CEO Syed Yasir Arafat Syed Abd Kadir said in a statement. 

He said the main areas of focus within the value creation plan included streamlining the operational processes and systems, corporate outlet expansion and penetration into new mass market regions, as well as enhancements in its product offerings and marketing strategies. 

Coolblog has over 270 stores in Malaysia offering more than 25 flavours and over 300 product variants. 

According to Ekuinas, the company’s sales increased from RM34 million to RM46.9 million from FY2017 to FY2019 with a compound annual growth rate of 17.4%.  

This was primarily driven by growth and stronger outlet performance nationwide, coupled with innovative and successful product offerings, it said. 

Archipelago invests in small to mid-market companies in South East Asia, focusing on consumer goods and services, financial services, and industrial and logistics. 

Syed Yasir said Archipelago was selected based on its strong track record in the fast moving consumer goods segment, experience in the business-to-consumer retail space as well as in-house expertise in the food and beverage (F&B) sector. 

Jovasky Pang, the CEO of Archipelago, said: “We see tremendous potential in Coolblog. It has demonstrated robust growth as a business in terms of offerings and profitability. With the growing population and rising youth demographic in Malaysia, we see more opportunities to grow the business.”  

Pang said Archipelago has been looking for the right entry-point to strengthen its regional F&B and consumer portfolio, and the opportunity to invest in Coolblog is timely. 

“Moving forward, we will leverage our sizeable and established network across South East Asia to execute our vision and strategy for the company. We look forward to working closely with the management team, franchisees, suppliers and other stakeholders to continue the successful growth of Coolblog,” he said.