Village Grocer Holdings Sdn Bhd (VGH), the owner of the premium supermarket chain Village Grocer, announced that it has acquired a 100 percent stake in Ben’s Independent Grocer Sdn Bhd (B.I.G.) from The Big Group.
The acquisition is done at a valuation of about 12 times price-earnings ratio, and the purchase consideration will be satisfied through cash and shares.
With this deal, Navis Capital Partners-backed Village Grocer will gain control over B.I.G.’s chain of grocery outlets, further strengthening VGH’s position as one of the leaders within the premium grocery segment.
“The acquisition of B.I.G. is a strategic business decision that fits in very well with our long-term growth and expansion plans within the premium grocery market,” said VGH Group Executive Chairman, Ong Kim Too.
“With this acquisition, we have an opportunity of extracting procurement and operational synergies to better serve a growing market segment,” he added.
Together, VGH and B.I.G. will consolidate their assets, bringing it to a total of 13 outlets and a combined annual revenue of approximately RMYR560 million (about US$127 million).
“We will be able to provide the increasingly discerning Malaysian consumers with a wider range of local as well as imported products that are one of the highest quality, freshness, and value,” Ong explained.
Village Grocer is founded in 2004 with its first outlet in Bangsar Village mall. VGH today operates a total of 10 outlets in the Klang Valley, including its recently opened ones at MyTOWN Shopping Centre in Cheras and KL Gateway Mall in Bangsar South.
“B.I.G., on the other hand, has managed to grow to where it is today within a relatively short period of time and we are confident that Village Grocer is able to grow the brand further. We are extremely excited for the next phase of B.I.G.’s evolution,” said Benjamin Yong, the founder of Big Group.
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 where it has three outlets located in Publika Shopping Gallery, Plaza Batai, and Glo Damansara.
According to Big Group, the purpose of divestment on its retail grocery business is primarily to focus on the growth of its food and beverage businesses.
Following the acquisition, both Village Grocer and B.I.G. will continue to exist and operate as two separate brands, and B.I.G. will continue to be run by its present management team.
“Both Village Grocer and B.I.G. have very strong, distinct identities and have through the years attracted strong consumer followings respectively,” Ong said. “Expansion plans for both brands are in the pipeline and we are targeting to open a few more outlets in, and outside of, the Klang valley over the next 18 months.”
By Vivian Foo, VCNewsNetwork
This news is published on Reuters.