【Vietnam M&A Deal】Top-ranked food wholesaler in the industry

Introduction

What we want to convey in this article

Diamond imports food products from Japan, Europe, and North America and distributes them to more than 6,500 hotels, restaurants, and supermarkets in Japan.
The company will develop a chain of sushi restaurants under its five-year management plan and set a goal of a seven-fold increase in sales.
To implement its management plan, the company has raised more than $4 million from domestic and foreign investors.

Introduction
Introduction of The Selling Company
Diamond Appeal Points
1. Majority Customers
2. Promising growth potential
Investor Expectations
Expected synergies
Vietnam F&B Market Potential
Contact Us

Introduction

In this issue, we would like to introduce an investment project of a food wholesale company (tentative name: Diamond) in southern Vietnam. The company is formulating a new growth strategy and is seeking funding from domestic and foreign investors in order to develop new businesses. If you are interested in investing in Diamond after reading this report, we would be happy to hear from you.

Introduction of The Selling Company

Diamond was established in 2008. The company imports food products from Japan, Yoroppa, and North America and distributes them domestically to upscale hotels, resorts, restaurants (HORECA), supermarkets, and food processing companies. The company has maintained sales growth by developing a new sushi delivery business in the Corona Vortex, and has set a goal of a sevenfold increase in sales by expanding the sushi chain and implementing franchising in its five-year business plan.

Overview of The Investment in Diamond

Establishment	2008
Business	Food import and wholesale
Head Office Location	Southern Vietnam
Domestic branch office	4 locations
Overseas branch office	4 locations
Number of employees	100~200 people
Net sales	500-600 million yen（2019)
Transfer ratio	49% or less
transfer price	US$ 4millions ~
Shareholder Composition	CEO:90%、2 others :8%と2%

出所：Diamond社へのヒアリングよりVietBiz編集部作成

Main Clients

Diamond has established a nationwide distribution network and has wholesaled food products to more than 6,500 customers. The customers are as follows.

・Restaurant operations: approx. 1,650 companies

・Hotels : approx. 2,800 locations

・Supermarkets: approx. 450 stores

・Food processing companies and retailers: approx. 1,700 companies

Warehouse and Transport Vehicles

Each of the company’s five nationwide warehouses is capable of carrying up to 350 tons. Each warehouse is fully equipped with frozen, refrigerated, and room temperature storage facilities to ensure proper temperature control and quality assurance for a wide variety of foods. The company has refrigerated trucks at five locations, allowing for quick delivery to customers nationwide.

Diamond Appeal Points

Two points are mentioned as appealing points for Diamond.

Majority Customers

It has a sound distribution system and wholesales to more than 6,500 customers nationwide. Customers include upscale hotels and resorts, as well as large supermarkets. The company’s large clientele provides a stable, high-volume order flow, which is the foundation for Diamond’s steady growth.

Promising growth potential

Diamond has formulated a five-year management plan for the period 2023-2027. In that plan, the company expects sales of 1.1 billion yen in 2023 and 3.5 billion yen in 2027, a seven-fold increase over 2022 sales. The three factors for sales growth are (1) customer expansion, (2) sushi delivery, and (3) the development of sushi chains and franchises as the main growth axes.

Investor Expectations

The reason Diamond is calling for investment in itself is to raise funds to expand its B2C sushi delivery, sushi chain, and sushi franchise nationwide. The company also hopes to secure working capital to cover delays in payments from customers due to the impact of the new type of coronavirus infection.

Expected synergies

Expected synergies from the investment in Diamond include expansion of the logistics network to Vietnam through the company’s many customers and capital gains from the investment in a promising business.

Vietnam F&B Market Potential

In 2021, Vietnam’s total food and beverage (F&B) retail value was $54.9 billion, contributing about 16% of the country’s GDP; in 2023, total F&B retail value is expected to increase to $66.3 billion. Vietnamese households are expected to spend 20.8% of their total household income on food in 2025. Vietnam’s middle class will be the seventh fastest growing in the world, reaching 23.2 million in 2030, accounting for 22% of the total population. As a food culture, they eat out with friends and family at the end of the workday or on holidays. This is seen as a factor in the growth of F&B.