The trend of mergers and acquisitions (M&A) continue to hog the limelight this year with another big name taking the route, this time its Loob Holdings the owner of popular bubble tea brand Tealive selling 30% of the company to private equity firm, Creador. This is however is a strategic move, focused on long-term investments and growth to take the Tealive brand beyond its current potential and possibly for listing.
In a joint statement, both companies expressed confidence the partnership would take Loob to the next level, especially given Creador’s track record in aiding in the regional growth of its investee companies.
Creador founder and CEO Brahmal Vasudevan said the firm chose Loob to be its first investment in the fast-growing food & beverage sector as Tealive has grown to be the regional leader with over 650 stores in less than five years.
Brahmal cited Loob’s impressive revenue of RM307m and net income of RM58m for FY2020. This translated to a phenomenal three-year compounded annual growth rate (CAGR) of 56% in revenue and 180% in net income.
According to the investment maestro, despite the pandemic, Tealive’s multi-format outlets, which include shoplots as well as outlets in malls and petrol kiosks, and its omnichannel offerings via food delivery platforms have helped it maintain a stellar performance. The investment will be conducted through Uttama Limited, an affiliate of Creador IV LP.
He also added that the Made-To-Order tea market in Malaysia has been growing over 20% in the last few years and beverage chain per million population remains underpenetrated when compared with peers in the region and developed countries.
Loob Holding Founder and CEO Bryan Loo welcomed Creador as a strategic investor and partner, adding that the timing could not be better with Tealive’s plan to hit the 1,000th store milestone in Malaysia in the next three years.
“We have just celebrated our 600th store in Malaysia opening last month and we plan to open 100-150 stores each year moving forward. We are always thankful for the strong brand loyalty and support shown by Malaysians and tea lovers in every market we go into.
“We will continue to focus on our digital strategy and prioritising customer convenience including various cashless and contactless ordering channels – scan to order, order ahead and drive-in model across the store network,” he said.
In addition to the popular Tealive brand, Loob Holding’s stable includes new beverage series, Ready-To-Eat food products under the brand of Tealive Eats, and affordable coffee chain Bask Bear Coffee.
Loob is Creador’s 39th investment since inception in 2011. Nomura acted as the financial adviser on this transaction.
