This article first appeared in The Edge Financial Daily on April 13, 2017

KUALA LUMPUR: Navis Capital Partners, one of Southeast Asia’s biggest private equity (PE) firms, has expanded its premium grocery shopping business in Malaysia, following the recent acquisition of the Ben’s Independent Grocer (B.I.G.) supermarket chain by its majority-owned subsidiary Village Grocer Holdings Sdn Bhd, said sources.

According to industry observers, the move will see the consolidation of the PE firm’s grocery shopping assets. Navis already holds an indirect stake in the B.I.G. supermarket chain through its shareholding in the BIG Group.

“The acquisition will see Village Grocer — which operates the Village Grocer premium supermarket chain — strengthening its position in the premium grocery shopping segment as it will result in it having a total of 12 outlets and a combined revenue of over half a billion ringgit. It will also bring about operational synergies,” one source told The Edge Financial Daily.

“The deal is done at a valuation of about 12 times price-earnings ratio,” the source added.

Another source said the purchase consideration will be satisfied through a combination of cash and shares.

“Following the transaction, Navis will hold a bigger stake in the B.I.G. supermarket chain, while some of the founding shareholders of the BIG Group will hold a small stake in the enlarged Village Grocer group. The present management of B.I.G. will continue to run the chain, and both supermarket brands will continue to run on their separate brandings,” the source said.

“As for the BIG Group, it will be focusing on its existing food and beverage business moving forward — a segment close to its founder Benjamin Yong’s heart, the source added.

Yong founded the BIG Group in 2011 and together with his team grew a range of restaurants that include Ben’s, Beast and Plan B. In the same year, the group also entered into the grocery scene through the B.I.G. supermarket chain and today has three outlets in Plaza Batai, Publika and Glo Damansara in the Klang Valley.

In September 2014, Navis acquired a majority stake in Village Grocer from businessman Ong Kim Too and his family who opened the first Village Grocer store in Bangsar Village in 2004. The Ong family continues to hold a substantial stake in the company today.

Navis acquired a substantial stake in the BIG Group at the end of 2015. Last year, the company acquired the Oriental Group of Restaurants, which operates 12 restaurants in the Klang Valley including Noble House, Noble Banquet, The Ming Room, Maju Palace Oriental Pavilion and Oriental Banquet.

Navis also has investments in the food processing, fast-food, casual dining, industrial product, fast-moving consumer goods, outdoor advertising, auto rental, consultancy and professional service businesses. Founded in 1998 and headquartered here, Navis manages several private and public equity funds totalling US$5 billion (RM22.15 billion) to date.

At end-June 2016, Navis Asia Fund realised track record was a gross internal rate of return of 22% and money multiples of 2.5 times.

Navis is not the only PE firm that has ventured into the grocery shopping business. Last May, a PE fund managed by CIMB Private Equity and Japan’s Mitsubishi Corp was reported to have acquired a substantial stake in local supermarket chain Jaya Grocer.