30/1/2018 – Mekong Capital, a private equity firm which focuses on Vietnam has announced that its Mekong Enterprise Fund II (MEF II) has made a full exit from its investment in MobileWorld Investment Joint Stock Company (MWG).
On 29th January, the firm sold its final block of 5 million shares at the price of VND 165,000 apiece, which translates to about US$7.30. This totals up to a cumulative net proceed of US$199.4 million.
MEF II previously invested US$3.5 million in the Vietnamese mobile device and home appliance retailer for a 35 percent stake in 2007.
This was the culmination of an exit process that began with a pre-listing private placement shortly before the 2014 public listing of MWG on the Ho Chi Minh City Stock Exchange and involved a gradual sale of blocks of shares to institutional investors approximately once per quarter after the listing.
Over the 10.5 years holding period of this investment, the firm has generated as a return multiple of 57 times in US Dollars and an IRR of 61.1 percent in a net of taxes and transaction expenses, making it one of the most successful private equity investments in the history of Asian Private Equity.
“When we originally invested into MobileWorld in 2007, they had seven stores and a US$10 million company valuation,” said Chris Freund, Partner at Mekong Capital. “Our original goal was to increase to 50 stores and a US$50 million company valuation The success of this investment has exceeded our wildest expectations.”
“It’s unfortunate that we now must complete our 10.5-year journey together with MWG,” he stressed. “Our fund MED II was launched in 2006 and ultimately had a 12-year term, hence we need to complete the divestment of our remaining investments in MEF II including MWG in the first few months of 2018.”
Freund also emphasized that Mekong Capital wants to continue as a shareholder of MWG for the foreseeable future especially as they ramp up Bach hoa XANH into Vietnam’s leading supermarket chain.
During its 10.5-years holding period by the MEF II, MWG has grown from seven stores to over 2,000 stores today under four different retail brands including thegiodidong.com. Dien may, XANH, Bach hoa XANH, and vuivui.com.
Besides, the company has also recently announced the acquisitions of Tran Anh Digital World and Phuc An Khang pharmacy chain.
Founded by a team of 5 co-founders in 2004, MWG initially established itself as the market leader and most prominent mobile device retailer in Vietnam, specializing in mobile phones, laptops, accessories, and other related products through its thegioididong.com store network.