CP group of Thailand's feed business in China and Carlyle private equity's investment
By Jon Fernquest
CP Group is Thailand's largest business
conglomerate.The animal feed subsidiary of CP Group is the "second-largest supplier of animal-feed products" in China and "has been active in China since the country first opened its doors to foreign investment in the late 1970s."
The Carlyle Group, one of the premier private equity firms in the US, gave CP Groups its seal of approval this week by acquiring a 11% stake in the animal feed business.
Today's article takes a closer look at this deal. It begins after the vocabulary.
Charoen Pokphand Group -
the largest business conglomerate in Thailand (See Wikipedia)
conglomerate - a large company that joins together many companies with different business activities (See Wikipedia)
feed - animal food (See Wikipedia)
subsidiary - a smaller company owned by a larger company
active - working, operating, doing its job, runninf its business
Carlyle Group - a global private equity investment firm, based in Washington, D.C....operates four fund families, focusing on leveraged buyouts, growth capital, real estate and leveraged finance investments. The firm employs more than 890 employees, including 495 investment professionals in 20 countries with several offices in the Americas, Europe, Asia and Australia; its portfolio companies employ more than 415,000 people worldwide. Carlyle has over 1300 investors in 71 countries" (See Wikipedia)
private equity - "money invested in companies that are not publicly traded on a stock exchange or that is invested as part of buyouts of publicly traded companies in order to make them private companies. Among the most common investment strategies in private equity include leveraged buyouts (LBO), venture capital, growth capital, distressed investments and mezzanine capital. Many times these investments are short-term in nature." (See Wikipedia)
premier - among the best, largest or most important
seal of approval - something said or done to show approval and admiration
acquiring - buying
stake - owning part of something
conglomerate - a large company that joins together many companies with different business activities (See Wikipedia)
feed - animal food (See Wikipedia)
subsidiary - a smaller company owned by a larger company
active - working, operating, doing its job, runninf its business
Carlyle Group - a global private equity investment firm, based in Washington, D.C....operates four fund families, focusing on leveraged buyouts, growth capital, real estate and leveraged finance investments. The firm employs more than 890 employees, including 495 investment professionals in 20 countries with several offices in the Americas, Europe, Asia and Australia; its portfolio companies employ more than 415,000 people worldwide. Carlyle has over 1300 investors in 71 countries" (See Wikipedia)
private equity - "money invested in companies that are not publicly traded on a stock exchange or that is invested as part of buyouts of publicly traded companies in order to make them private companies. Among the most common investment strategies in private equity include leveraged buyouts (LBO), venture capital, growth capital, distressed investments and mezzanine capital. Many times these investments are short-term in nature." (See Wikipedia)
premier - among the best, largest or most important
seal of approval - something said or done to show approval and admiration
acquiring - buying
stake - owning part of something
Economics
Carlyle invests in CP feed
US fund sees big potential in China10/07/2010
Post Reporters
Charoen Pokphand Group, the country's largest agribusiness conglomerate, has agreed to sell an 11.3% stake in its Hong Kong-listed animal-feed maker C.P. Pokphand Co to the global investment firm Carlyle Group for US$175 million.
C.P. Pokphand is China's second-largest supplier of animal-feed products in terms of sales. The firm has benefited in recent years from rising household incomes in the world's most populous country.
CP feed -
the company within CP Group (subsidiary) that sells animal
food
fund - a collection of money for some investment or other purpose เงินทุน กองทุน
potential - the possibility of success ที่มีศักยภาพ ที่เป็นไปได้
agribusiness - business having to do with agriculture
conglomerate - a large company joining together a group of companies with different business activities
stake - a share or a financial involvement in something such as a business
C.P. Pokphand Co - the subsidiary of CP Group that produces animal feed, doing business since the 1970s
global - throughout the world ทั่วโลก
investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
firm - a company บริษัท
X in terms of Y - X measured by Y
household - a group of people, often a family, who live together ครัวเรือน
populous - having a lot of people living there ซึ่งมีพลเมืองหนาแน่น
fund - a collection of money for some investment or other purpose เงินทุน กองทุน
potential - the possibility of success ที่มีศักยภาพ ที่เป็นไปได้
agribusiness - business having to do with agriculture
conglomerate - a large company joining together a group of companies with different business activities
stake - a share or a financial involvement in something such as a business
C.P. Pokphand Co - the subsidiary of CP Group that produces animal feed, doing business since the 1970s
global - throughout the world ทั่วโลก
investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
firm - a company บริษัท
X in terms of Y - X measured by Y
household - a group of people, often a family, who live together ครัวเรือน
populous - having a lot of people living there ซึ่งมีพลเมืองหนาแน่น
Demand for meat in China is rising, as more farm labourers migrate to cities to work. As a result, the remaining farmers who continue to work on the land need to improve productivity, in part by using commercial feed.
Food scares have also prompted the Chinese government to support larger-scale farming and the use of commercial animal feed.
migrate
- if people migrate, they travel in large numbers to a new place to
live temporarily อพยพ (ตามฤดูกาล), ย้ายถิ่น
improve - to make better ทำให้ดีขึ้น
productivity - producing more with the same amount of inputs (labour, energy, etc) การผลิตสินค้า
feed - food for animals
commercial feed - food for animals produced and sold by a company (higher quality than produced on the farm)
food scares - a situation in a country when the public is frightened when it seems that food will run out and some people will go hungry
prompted - caused them to take action
support - help สนับสนุน
scale - size (relative size)
improve - to make better ทำให้ดีขึ้น
productivity - producing more with the same amount of inputs (labour, energy, etc) การผลิตสินค้า
feed - food for animals
commercial feed - food for animals produced and sold by a company (higher quality than produced on the farm)
food scares - a situation in a country when the public is frightened when it seems that food will run out and some people will go hungry
prompted - caused them to take action
support - help สนับสนุน
scale - size (relative size)
C.P. Pokphand last year recorded sales of $74.24 million and gross profit of $9.5 million from swine, poultry, cattle and fish feed.
The fastest-growing segment was fish feed, reflecting the growing number of fish farms in China.
profit
- money that you make from selling goods and services after all your
costs have been paid กำไร
gross profit - sales of goods or services less the cost of producing or providing them, before overheads, interest and tax are taken off (See Wikipedia)
swine - pigs
poultry - birds that are raised for their meat and eggs such as chickens and ducks (See Wikipedia) เนื้อสัตว์ปีก
cattle - cows (female) and bulls (male)
segment - market segment
market segment - a group of possible customers in a market for a certain kind of good or service who have income, age, habits, etc (See Wikipedia)
gross profit - sales of goods or services less the cost of producing or providing them, before overheads, interest and tax are taken off (See Wikipedia)
swine - pigs
poultry - birds that are raised for their meat and eggs such as chickens and ducks (See Wikipedia) เนื้อสัตว์ปีก
cattle - cows (female) and bulls (male)
segment - market segment
market segment - a group of possible customers in a market for a certain kind of good or service who have income, age, habits, etc (See Wikipedia)
According to a company statement, Carlyle Asia Partners III L.P., a $2.55 billion pan-Asian investment fund of the Carlyle Group, would acquire $175 million worth of convertible preference shares and options in the feedmaker from its Thai parent company.
A majority of the proceeds from the deal would be used to prepay about $150 million of the intercompany debt of $288 million outstanding to C.P. Pokphand before the year-end.
pan-Asian - all
over Asia
investment fund - a company that collects money from investors and invests their money for them
acquire - to get; to obtain ได้มาซึ่ง
preference - something that you want or like most ความต้องการ
options - the right to buy an asset before a given date (See Economist Glossary on derivatives and Wikipedia) ทางเลือกที่ทำได้
majority - more than half of the people in a group ส่วนมาก
majority - more than half of the people in a group เสียงส่วนมาก
debt - an amount of money that you owe หนี้
outstanding - currently exists, has not ended yet
investment fund - a company that collects money from investors and invests their money for them
acquire - to get; to obtain ได้มาซึ่ง
preference - something that you want or like most ความต้องการ
options - the right to buy an asset before a given date (See Economist Glossary on derivatives and Wikipedia) ทางเลือกที่ทำได้
majority - more than half of the people in a group ส่วนมาก
majority - more than half of the people in a group เสียงส่วนมาก
debt - an amount of money that you owe หนี้
outstanding - currently exists, has not ended yet
CP Group is the single largest shareholder of C.P. Pokphand. The feedmaker has been active in China since the country first opened its doors to foreign investment in the late 1970s. It has 57 production facilities in 26 provinces and more than 26,000 exclusive distributors across China.
Carlyle sees great growth potential in China's agriculture sector and believes the rapidly expanding middle class, increasing demand for quality food supply, as well as heightened awareness of food safety and dietary issues, will underpin future growth in the sector," said Patrick Siewert, senior director of Carlyle.
single
- one only เดี่ยว
shareholder - a person who owns some of the stock shares of a company (and is therefore a part owner of the company)
active - working, operating, doing its job
facilities - the buildings, equipment and services provided for a particular purpose สิ่งอำนวยความสะดวก
production facilities - factories
exclusive - limited to a particular person, group or thing and not shared with others แต่ผู้เดียว
sector - a part of the economy (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,...) (See Wikipedia) ภาคเศรษฐกิจของประเทศ
demand - the need and desire to buy goods and services by households and businesses
awareness - the state of knowing about something การรับรู้, การทราบ
heightened awareness - knowing more about something
issues - subjects that need to be considered ประเด็น
shareholder - a person who owns some of the stock shares of a company (and is therefore a part owner of the company)
active - working, operating, doing its job
facilities - the buildings, equipment and services provided for a particular purpose สิ่งอำนวยความสะดวก
production facilities - factories
exclusive - limited to a particular person, group or thing and not shared with others แต่ผู้เดียว
sector - a part of the economy (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,...) (See Wikipedia) ภาคเศรษฐกิจของประเทศ
demand - the need and desire to buy goods and services by households and businesses
awareness - the state of knowing about something การรับรู้, การทราบ
heightened awareness - knowing more about something
issues - subjects that need to be considered ประเด็น
We believe that China's feed industry, driven by the change in demographics and government policies, is at a point where the industry will be more stable, and in turn, will favour the responsible, experienced and leading producers such as CPP.
Dhanin Chearavanont, chairman of CP Group and C.P. Pokphand, said China's feed industry was going through a dynamic period of growth driven by consumers' demand for higher-quality food and more stringent safety standards.
change in demographics
stable - not changing frequently and not likely to suddenly become worse มั่นคง คงที่ ไม่เปลี่ยนแปลง
favour - to give an advantage to someone or something, often in an unfair way ช่วยเหลือ
dynamic - moving not static and at rest, energetic and forceful จรวิสัย
X driven by Y - X caused by Y
standards - an acceptable level of quality or achievement มาตรฐาน
stringent safety standards - safety standards with great control over an activity to avoid danger and accidents
stable - not changing frequently and not likely to suddenly become worse มั่นคง คงที่ ไม่เปลี่ยนแปลง
favour - to give an advantage to someone or something, often in an unfair way ช่วยเหลือ
dynamic - moving not static and at rest, energetic and forceful จรวิสัย
X driven by Y - X caused by Y
standards - an acceptable level of quality or achievement มาตรฐาน
stringent safety standards - safety standards with great control over an activity to avoid danger and accidents
Carlyle's unique experience in the management of the food industry value chain will also support CPP to produce superior products and to become the leading supplier to China's livestock farming industry," said Mr Dhanin.
Under the deal, Carlyle would purchase approximately 2.271 billion convertible preference shares and is entitled to additional convertible preference shares in certain circumstances, for an aggregate price of $175 million.
unique
- very special, unusual or good ที่มีลักษณะพิเศษ เป็นเอกลักษณ์
unique experience - they are the only ones with this kind of experience
value chain - the series of steps in producing a product: design, manufacture, marketing, customer support
superior - better than everything else
livestock - animals such as cows, cattle, and sheep that are raised for commercial products such as meat, skins, or wool (See Wikipedia) ปศุสัตว์
purchase - buy
convertible - a bond or share that can be exchanged for ordinary shares (or some other investment)
preference shares - a stock share with regular payments (dividends) but without the right to vote at shareholder meetings, in the event that the company fails (bankruptcy) these share owners are paid before owners of all other shares, also called "preferred stock" (See Wikipedia)
entitled - having the right to have or do something มีสิทธิโดยชอบ
circumstances - situation, conditions in which we live
in certain circumstances - in a special situation, when a set of conditions exist
aggregate - the total amount, adding everything together
unique experience - they are the only ones with this kind of experience
value chain - the series of steps in producing a product: design, manufacture, marketing, customer support
superior - better than everything else
livestock - animals such as cows, cattle, and sheep that are raised for commercial products such as meat, skins, or wool (See Wikipedia) ปศุสัตว์
purchase - buy
convertible - a bond or share that can be exchanged for ordinary shares (or some other investment)
preference shares - a stock share with regular payments (dividends) but without the right to vote at shareholder meetings, in the event that the company fails (bankruptcy) these share owners are paid before owners of all other shares, also called "preferred stock" (See Wikipedia)
entitled - having the right to have or do something มีสิทธิโดยชอบ
circumstances - situation, conditions in which we live
in certain circumstances - in a special situation, when a set of conditions exist
aggregate - the total amount, adding everything together
The CP Group will grant approximately 324 million options, each carrying the right to acquire one convertible preference share in C.P. Pokphand at HK$0.60 per share to Carlyle.
Following the acquisition, Carlyle will own approximately 11.3% of C.P. Pokphand, with CP Group still owning about 70% on a fully diluted basis.
The deal with Carlyle is expected to close by July 22.
grant
- to officially give something ให้
acquisition - the buying of another company by a company
diluted - so something to make it less strong (example: the wine was diluted with water to make it less strong)
on a fully diluted basis - "Number of shares of Common Stock deemed to be outstanding immediately prior to new issue (includes all shares of outstanding common stock, all shares of outstanding preferred stock on an as-converted basis, and all outstanding options on an as-exercised basis; and does not include any convertible securities converting into this round of financing)." (Source: CMU lecture notes also see StartupLawyer)
expected - believe will happen คาดว่า (จะเกิดขึ้น)
acquisition - the buying of another company by a company
diluted - so something to make it less strong (example: the wine was diluted with water to make it less strong)
on a fully diluted basis - "Number of shares of Common Stock deemed to be outstanding immediately prior to new issue (includes all shares of outstanding common stock, all shares of outstanding preferred stock on an as-converted basis, and all outstanding options on an as-exercised basis; and does not include any convertible securities converting into this round of financing)." (Source: CMU lecture notes also see StartupLawyer)
expected - believe will happen คาดว่า (จะเกิดขึ้น)
(Source: Carlyle invests in CP feed, US fund sees big potential in China, 10/07/2010, Post Reporters, link)
