September 3, 2014

U.S.-based private equity firm KKR&Co. LP has sold its final stake in China Modern Dairy Holding selling 168 million shares at HK$3.70 earning $80 million.  For the six months ending June 30^th, China Modern Dairy reported after tax profits of $88.7 million – more than a 300% increase over the year before.  KKR and private equity firm CDH Investment initially paid $150 million in cash for a 34.5% stake in China Modern Dairy in 2008 after China’s dairy industry was rocked by a scandal involving infant formula tainted with the chemical melamine which killed six infants.  In the five years since KKR and CDH invested, China Modern Dairy increased its dairy herd from 24,000 cows to 180,000 and multiplied its farms from three to 22.  After Modern Dairy’s initial public offering in 2010 and the sale of a stake in the company to Mengniu in 2013, KKR’s initial investment nearly tripled.  KKR remains an investor in China’s dairy sector partnering with China Modern Dairy and CDH Investment in Asia Dairy, a dairy farm established in 2013 to supply China with high quality dairy products.

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