VinaCapital, through a fund, on Thursday inked a deal to buy a 20 percent stake in Yen Viet Joint Stock Company, a domestic bird's nest products seller.
Under the agreement, VinaCapital Vietnam Opportunity Fund (VOF) will pay US$7.5 million for the acquisition. Yen Viet will spend $7 million upgrading its factory in the central province of Ninh Thuan and use the remaining capital to promote its brand.
For its part, VinaCapital will assist the company in strengthening its distribution channels, production capability and product development.
In addition, the fund will help Yen Viet improve corporate governance and examine the possibility of a listing on a Vietnamese or international stock exchange.
Andy Ho, Managing Director of VOF's Investment Manager, said the fund's investment in Yen Viet is a testament to the fact that VinaCapital continues to be a dominant player in the private equity space in Vietnam.
"The consumer goods sector is particularly attractive given its growth prospects, and Yen Viet is a perfect example of Vietnam's potential in high-margin, high-growth consumer products," he said.
In 2010, Yen Viet posted revenues of VND270 billion ($13 million) while the total sales of the bird's nest sector in the country was around VND1 trillion per year, said Vo Thai Lam, CEO of the company.
Lam also said his company would consider launching a chain serving fast food made from bird's nest in the future.
The edible nests of swiftlets are considered a delicacy in many parts of East and Southeast Asia. The largest market is China, particularly Hong Kong, where bird's nest is used as part of traditional medical remedies.