FountainVest to buy Papa John's Pizza China franchisee from EQT

[HONG KONG] FountainVest Partners has agreed to purchase China F&B Group, which runs Papa John's Pizza and Dairy Queen outlets in the world's most-populous country, people familiar with the matter said.

The Hong Kong-based private equity firm will take over the restaurant chain from current owner EQT AB, a Swedish buyout firm, and other holders for about US$160 million, the people said, asking not to be identified as the information is private. Negotiations to conclude the deal are ongoing and there's no certainty it will be closed, they said.

EQT bought a majority stake in China F&B in 2013 with other investors for an undisclosed amount.

Representatives for FountainVest and EQT declined to comment.

Founded in 2003, China F&B is the largest ice-cream restaurant chain and the second-biggest pizza outlet chain in the Asian nation, according to EQT's website. It also operates the local franchise for Brut Eatery, which serves healthy food.

If the deal is successful, it would be FountainVest's fourth acquisition this year in the Asia-Pacific region, where it has invested at least US$2 billion in the past 9 months, mostly in China.

Besides betting on a fast-growing consumer market, it is also focusing on the changing habits of an affluent younger generation that spends more on products linked to a healthy lifestyle and sustainability.

FountainVest has poured cash into assets ranging from makers of calcium supplements and pet food to international beauty brands. This month, FountainVest gained control of Beijing Zhendong Langdi Pharmaceutical for US$900 million, after leading a US$100 million investment in March in Shanghai-based Ushopal, a Chinese luxury beauty group.

In September, it bought New Zealand-based pet-food company Ziwi. Other investments include Pure Group, a gym and yoga chain in Hong Kong.

Portfolio company Ushopal last week announced a new round of financing into Bulk Homme, a Japanese men's skincare brand, after committing to investing in Argentum Apothecary, a luxury skincare brand from London.

BLOOMBERG