Singha signals buy of major stake in Santa Fe

Singha signals buy of major stake in Santa Fe

The Santa Fe Steak restaurant at Terminal 21 Korat. photo courtesy of wongnai
The Santa Fe Steak restaurant at Terminal 21 Korat. photo courtesy of wongnai

Singha Corporation confirms that it has acquired a majority stake of up to 90% in local steakhouse chain Santa Fe.

The deal will be made through new subsidiary Food Factors Co, which is tasked with expansion of the group's food business in domestic and international markets.

Details of the deal are scheduled to be announced on Oct 28, according to a source who requested anonymity at Singha Corporation, an investment arm of Boon Rawd Brewery Co, the maker of Singha beer.

AVCJ, a provider of private equity and venture capital intelligence in Asia, first reported that Thailand-based private equity firm Lakeshore Capital had offloaded its entire stake in local steakhouse chain Santa Fe to Singha Corporation for US$50 million (1.52 billion baht).

The private equity firm first invested in KT Restaurant, the operator of the steakhouse chain, in early 2015, according to International Legal Counsellors Thailand, which advised on the deal.

The report said the initial funding was $4.5 million for an undisclosed stake. Based in Bangkok, Santa Fe's restaurants are mostly in the capital. The company also has one restaurant in Cambodia's Phnom Penh.

Lakeshore Capital was founded in 2009. It launched the $60-million Lakeshore Capital Fund I in 2015. Santa Fe is understood to have been the fund's second investment.

Last year, the firm announced the acquisition of a controlling stake in analgesic product maker Devakam Apothecary Hall, its sixth investment.

Piti Bhirombhakdi, strategic supply chain officer and director at Boon Rawd Brewery, said in March 2018 that the group planned to splurge 5 billion baht to expand its food business globally between 2018 and 2020, aiming to raise food sales to 15 billion baht by 2020.

Of the total investment, 2.5 billion baht will be assigned to Food Factors, with the balance going to finance the brewery's supply chain development.

Mr Piti said the expansion of the food business stems from the company's belief that food is one of the four necessities of life and will not be affected by any digital disruption.

Food Factors aims to develop a strategic network for its food business by co-investing with each country's local manufacturers.

Boon Rawd Brewery has expanded its food business mainly via beer distributing companies over the past nine years. Some 80% of food sales are from the domestic market, and the export market accounts for the rest.

Mr Piti predicts sales of the group's food business to reach 15 billion baht by 2020, up from 2.5 billion baht in 2017.

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