KUALA LUMPUR: The Edge has learnt that Loob Holding Sdn Bhd — the holding company to bubble tea brand Tealive — has sold a strategic stake of 30% to private equity firm Creador. Sources say the price was in the RM260 million range.

When contacted on this, Creador and Loob both in a joint statement expressed confidence the strategic partnership would take Loob to the next level, especially given Creador’s track record in aiding in the regional growth of its investee companies.

They however were silent on the price. 

Looking at Loob’s latest earnings of RM53.5 million for FY2020 (ended June), a price in the RM260 million range would be at a historical PE of 16.2 times.  

Berjaya Food — the franchisee of Starbucks Coffee outlets in Malaysia and Brunei — is trading at a PE multiple of 240 times, but this is because the company had one loss making quarter in the trailing 12 months with the other three quarters profitable. 

Taking the most recent historical earnings with a full profitable financial year, Berjaya Food was trading at a historical PE of 20.8 times in FY2019 (ended June).

Public data show that Loob’s recent earnings increased notiecably in FY2020. 

Net profit for FY2020 increased 79% year-on-year to RM53.5 million in FY2020 from RM29.88 million in FY2019, according to CTOS information. It made a net profit of RM2.36 million in FY2017 and RMRM1.96 million in FY2018.

The pace of revenue growth seem to be in tandem with its earnings for the period FY2020 and FY2019, with Loob’s topline expanding 77% year-on-year to RM319.5 million in FY2020 from RM180.4 million. 

The company registered RM68.06 million revenue in FY2017 and RM86.15 million in FY2018.

In February, The Edge quoting sources, had reported that Loob was looking at a strategic stake sale.

When contacted on this back in February, Loob’s Loo declined to comment.

“The only thing I can say is that we are committed to continue growing our business during this challenging yet fruitful period while ensuring that the welfare of our staff is being protected at the same time,” he told The Edge then.

Loob had planned for an IPO exercise but that was delayed due to market conditions amid the Covid-19 pandemic.

Loo was quoted in the media last year as saying that the company will postpone the IPO exercise, citing weak market sentiment.

More to come