Here is your task
Make sure you’ve read through the transcript of our call with the Hong Kong Director as well as my notes from the call that provide an overview of the targets. You can find these attached below.

Following this, consider all five targets discussed and email Anna with a concise description (1-2 sentences) of each company and why they are (or are not) appropriate to share with Carlos as potential M&A targets. Please use the email template provided below.

Note: when deciding if a target is appropriate to share with Carlos, you can consider the following elements:

Does this make sense from a strategic and financial perspective - consider which acquisitions may be a good fit for your client
Given the shareholder structures of the targets, consider the simplicity/feasibility of each option


Here is the transcript:
US MD: Hey Sarah, it’s Mark here. How’s it going?
HK MD: Hi Mark – it’s been busy. Great to hear from you again!
US MD: Thanks for making time to speak on this.
HK MD: No worries at all.US MD: One of my clients, a beverage company based here in the US, is looking to expand
overseas and thought Asia would be a good market to look at. I was wondering if you could share with us a couple of
beverage company opportunities we could share with the client.
<Company 1: HappyHour Co>
HK MD: Of course. One company I can think of is HappyHour Co. They operate in beers, spirits, and non-alcoholic
beverages, and are a market leader in Singapore and Malaysia. They’ve also recently expanded into China.
HappyHour Co is pretty much integrated – they handle their own manufacturing facilities, distribution and sales.
Operations are located throughout Southeast Asia and China. The business is pretty sizeable as well – they reported
US$300mm in EBITDA for FY2020, which is a 20% increase from the previous year.
US MD: Who are the current owners? Are there any shareholding dynamics we should be mindful of?
HK MD: HappyHour Co is owned amongst three families. In fact, the largest and controlling shareholder is looking to
retire soon, and have launched a process to seek out potential buyers in the market. He wants to remain in
management though, so the seller is most likely looking for a strategic player to come in.
US MD: Perfect. How much does the seller own?
HK MD: 60%.
US MD: Got it. Any other companies we should consider?
<Company 2: Spirit Bay>
HK MD: You can also take a look at Spirit Bay. They are an Indonesian company, operating in beers, spirits and nonalcoholic beverages in Singapore, Malaysia and China. They are the #1 player in Indonesia, and #2 in Singapore and
Malaysia. Operations are integrated too. Think their manufacturing facilities are located in Indonesia.
US MD: How about their earnings?
HK MD: Spirit Bay is reported US$400mm in EBITDA, which is up 40% from the previous period.
US MD: The growth rate seems pretty attractive. Have they expanded into new markets recently?
HK MD: No they haven’t. In fact, they are 60% owned by a Global Sponsor, and have been undergoing aggressive
cost cutting measures to improve their earnings.
US MD: I see.
<Company 3: Hipsters’ Ale>
HK MD: There’s also Hipsters’ Ale, a Malaysian beer and spirits company operating in Singapore, Indonesia, Japan,
Korea and Cambodia. Hipsters’ Ale also manufacture, distribute, and sell their products directly – similar to the other
two companies I’ve just mentioned.
US MD: Anything special I need to keep in mind about Hipsters’ Ale?
HK MD: The company is owned by 30 independent breweries. In fact, the manufacturing facilities is led by a
consortium of independent microbreweries in each respective region. US MD: Interesting. How about the size of the
business?
HK MD: US$200mm EBITDA in FY2020, up 15% on the previous period.
<Company 4: Brew Co.>
HK MD: I can also think of Brew Co, a Malaysian beer and spirits company. They only operate manufacturing
facilities, but are the #1 alcohol manufacturing player in Malaysia.
US MD: Who are the owners?
HK MD: Shareholders are mostly institutional. They are listed on the Bursa Malaysia, the stock exchange in Malaysia.
US MD: And have the business been growing?
HK MD: They’ve earnt US$800mm in EBITDA for FY2020, which is actually 5% down from last year.
US MD: I see. I think we can try to show one more idea to our client. Anything else we should consider?
<Company 5: Bevy’s Direct>
HK MD: Let me see... there’s Bevy’s Direct, based in Singapore. They operate in beer, spirits and non-alcoholic
beverages across Malaysia, China, Indonesia, Japan, Korea, Cambodia, Australia and New Zealand, but they only do
wholesale distribution. The owner is a wholefoods retailer, and they recorded US$250mm in FY2020 EBITDA, up 20%
from the year prior.
US MD: Great, that should provide our client with a good list of opportunities to start with. Thanks again for your
time. Really appreciate it.
HK MD: Don’t worry about it, let me know if you have any questions later on


Here are notes from the call:

Client – Worldwide Brewing
• Largest US manufacturer and supplier of beer, spirits and non-alcoholic beverages in the US
• Current operations generate US$1bn of EBITDA annually
• Limited domestic growth opportunities, looking to expand overseas
• CEO has identified Asia as a key opportunity as a rising middleclass is rapidly increasing the
demand for more premium beverages
Company 1 – HappyHour Co.
• HQ: Singapore | Other locations: Malaysia, China
• Segments: Beer, Spirits, Non-alcoholic beverages
o #1 player in Singapore and Malaysia
• Operations: Manufacturing facilities (Singapore, Malaysia (outsourced), China, new facilities
planned for Cambodia), Distribution, and Direct Sales
• Shareholders: Owned solely by three families (one has passed away forcing a sale process)
• EBITDA US$300mm (FY June 2020 actuals) up 20% pcp
Company 2 – Spirit Bay
• HQ: Indonesia | Other locations: Singapore, Malaysia, China
• Segments: Beer, Spirits, Non-alcoholic beverages
o #2 player in Singapore and Malaysia, #1 in Indonesia
• Operations: Manufacturing facilities (Indonesia), Distribution, and Direct Sales
• Shareholders: 60% owned by Global Sponsor, 40% employee owned
• EBITDA US$400mm (FY June 2020 actuals) up 40% pcp
Company 3 – Hipsters’ Ale
• HQ: Malaysia | Other locations: Singapore, Indonesia, Japan, Korea, Cambodia
• Segments: Beer, Spirits
• Operations: Manufacturing facilities (consortium of independent microbreweries in each
region), Distribution, and Direct Sales
• Shareholders: 30 independent breweries
• EBITDA US$200mm (FY June 2020 actuals) up 15% pcp
Company 4 – Brew Co.
• HQ: Malaysia
• Segments: Beer, Spirits
• Operations: Manufacturing facilities only
o #1 alcohol manufacturer in Malaysia
• Shareholders: listed on the Malaysian stock exchange (mostly institutional shareholders)
• EBITDA US$800mm (FY June 2020 actuals) down 5% pcp
Company 5 – Bevy’s Direct
• HQ: Singapore | Other locations: Malaysia, China, Indonesia, Japan, Korea, Cambodia, Australia,
New Zealand
• Segments: Beer, Spirits, Non-alcoholic beverages
• Operations: Wholesale Distribution only
• Shareholders: Owned by one family
• EBITDA US$250mm (FY June 2020 actuals) up 20% pcp