GSR Capital is launching a new USD5 billion mergers and acquisitions (M&A) fund, which will target cross-border buyouts and M&A of industrial and emerging technology companies with multi-billion dollar scaling opportunities in China.
The GSR Global M&A fund is anchored with USD1billion committed from GSR GO Scale Capital Limited Partners and institutional investors. The fund will be managed by GSR GO Scale Capital Advisor Ltd., the management company of the GSR GO Scale Capital Growth Fund, and intends to work closely with Good Resources Holdings Limited (HKEX: 00109) on management of all M&A deals with leverage of financial instruments, including co-investments from the global capital market. The fund will be managed by a team of industry leaders led by Sonny Wu, the Co-founder of GSR Ventures and Chairman of GSR Capital.
The global M&A market has seen continuous growth with the total transaction value in 2014 exceeding USD3.5 trillion USD. GSR Global M&A Fund, as one of the very few large-scale buyout funds in China, will target international investment opportunities in qualified leading enterprises in sectors including clean energy, bio-pharmaceutics and life sciences, bulk commodity investment, traditional and internet finance, wireless communication, and cultural industry.
"Our new fund will either buy-out or acquire a minority stake in target enterprises through a combination of equity and leveraged debt; and then we will create value for them by converging China and global resources, adopting cross-border and technical arbitrage and eventually realising the capital gains through IPO or M&A exits," says Sonny Wu, Co-founder of GSR Ventures and Chairman of GSR Capital.
"As one of the founders of the Trinity Group along with Ambassador Ford Fraker, we have had the great privilege to work with some of the most successful global buyout groups over the last twenty years. It is our strong belief that having worked with Sonny Wu (pictured), GSR GO Scale Capital for the last two years and recently Good Resources Holdings, we have witnessed the emergence of a world-class team of both investment professionals and operating partners. GSR GO Scale Capital, its partners and affiliates are on track to become one of the most outstanding and auspicious buyout groups of their generation and region," says Edward Frazer, Founder and CEO of Trinity Limited, a UK-based private investment banking firm.
Prior to the formation of this Global M&A Fund, GSR GO Scale Capital had already established an SPV to acquire 80.1 per cent of the shareholding of Lumileds, the original LED component and the automotive lighting company under Royal Philips. Lumileds is the market leader in the LED industry with market share of more than 10% in the global general lighting, more than 30 per cent in the automotive lighting and more than 50% in the mobile phone lighting market. Its customer base includes global market leaders such as Audi, BMW and Samsung. Lumileds is also a technology innovation leader owning 20 per cent of the total global LED patents.
The announcement of the Philips Lumileds acquisition on 27 May, 2015, was followed by GO Scale Capital and Philips choosing Bank of China as Mandated Lead Arranger and Sole Bookrunner of USD1.93 billion debt facilities to finance this landmark transaction. Bank of China has an extensive global service network, a diversified business platform and international business expertise to provide leveraged buy-out financing in support of private equity clients' acquisitions globally.
"We believe in the market potential of Philips Lumileds. And GSR GO Scale Capital demonstrated its deep understanding of the industry, its ability to quickly make decisions, as well as its professionalism and strong execution capabilities, which is among the top echelon of its peers. We look forward to working together on more deals through the GSR Global M&A Fund," says the Corporate Banking Group of the Bank of China.
"GSR Global M&A Fund will continue duplicating the early investment successes in Boston Power, Airspan and Philips Lumileds, creating value and superior returns through China localisation with a top-notch team of industry leaders like Dr Sun Shiwei, Jiang Hua and Allan Kwan, who are among the top experts in semiconductors, telecom and wireless internet," adds Wu.
