CAPITAL.MY

We help investors and entrepreneurs build lasting and profitable relationships.

Growth Capital for a Malaysia Master Franchise of Soya Food and Beverage Products

Growth Capital for a Malaysia Master Franchise of Soya Food and Beverage Products

Situation:

A group of young and enthusiastic individual has secured a master franchise from a Singapore-based leading soya bean food and beverage retailer to expand the presence of its brand in Malaysia. The first outlet was setup at the Curve with moderate sales. CAPITAL was appointed by the major shareholder to raise growth capital so that the brand continues to grow and franchisor–franchisee relations remain strong.

Challenge:

It has the strong potential to be the leading brand for soya bean products as the high market demands for consistent quality soya, with their modern soy offering, the company would be able to penetrate younger crowd. Nevertheless, these require time and effort in building up the brand value by adapting the right business model and customer value proposition to Malaysians.

Bank loan at this stage is not an option yet as it is a newly setup and the company’s shareholders were not in a position to infuse significant amounts of new equity capital into the business.

Solution:

CAPITAL worked with the key shareholder and management to strengthen the business plan and to prepare a financial model to analyze various scenarios on performance before preparing an investment package and approaching potential investors. Our roles:

Preparation of an “Investment Package” consists of investor’s deck, business proposal and presentations.
Approaching potential private equity investors.
Negotiation with investors of the key terms including valuation of the company.
Project management of the due diligence process.
Management of the documentation process.
Liaison between management and the private equity investor and
Driving all parties to achieve completion

The Result:

We obtained a detailed term sheet from a company investor that specialized in affiliates program within 3 months, providing RM500,000 growth capital, plus an attractive profit sharing scheme for management if certain sales targets were met. Of particular note, the company investor was willing to take a minority position, a highly unusual situation given the relatively early stage of the company.

Another plus was that the investor’s firm had extensive ties to the young community that could open doors for additional sales as well as new location and franchisee. The company is soon to open its new franchise outlets at Mid Valley, The Mine Shopping Mall and The Main Place at USJ. CAPITAL’S on-going role has been to work with management to implement the business plan and to continue to liaise with the investor group and management.

Capital Team