Behind a Private Markets
Deal
October 2025
Overview​
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Transactions are the bread and butter of private equity (PE) firms, who generate returns by buying companies at attractive valuations and selling them for profit. Each transaction follows a general structure, with variations depending on the nature of the deal.
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We have prepared the table below to illustrate the general process of a sell-side mandate, where the advisor is helping a company sell a business it owns (the target) to a PE buyer.
A transaction involves the following stages:
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Pitching: A bank will be mandated to serve as a financial adviser to the seller (target) and submit a teaser of the target to prospective buyers. These documents contain high-level information about the target while maintaining their anonymity.
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Bidding: Interested buyers submit indicative offers with key terms, such as the stake to be acquired and the estimated valuation. The seller will decide on their preferred offers, and mandated buyers (may be more than one) may proceed to draft a non-binding Letter of Intent (LOI) concretising their terms.
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Due Diligence: Mandated buyers sign an NDA with the seller to receive access to a virtual data room (VDR) prepared by the advisor. The VDR typically contains (i) a financial model, (ii) an information memorandum (IM) and (iii) various due diligence reports on the target and market. The buyers review the VDR and ask questions to the seller via the advisor in Q&A meetings. Once the buyers have enough information, they pitch the transaction to their Investment Committee (IC), who decide whether the buyers should proceed with the transaction.
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Structuring: Interested buyers negotiate finalised deal terms with the seller. The sell-side advisor advises the seller on which offer to accept and assists in coordinating legal teams to prepare a binding offer with finalised terms.
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Closing: The buyer seeks out debt financing (if needed) from banks and/or private credit firms to fund the investment. It then acquires the target via a Special Purpose Vehicle (SPV) which becomes the new entity under the ownership of the PE firm.
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Goals of a PE fund
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There are broadly two types of buyers: strategic and financial. Strategic buyers are operating companies who acquire targets synergistic to their business. These synergies include but are not limited to product diversification, cost savings and operational integration, allowing the entity to be worth more than the sum of their parts. Strategic buyers are thus usually willing to pay higher valuations to obtain these synergistic benefits and are more likely to hold on to the asset for as long as the benefits persist.
On the contrary, financial buyers have no operational business and purely generate returns from investment activities. PE funds staunchly fall into this category.
There are three key traits PE funds have when evaluating targets which distinguish them from strategic buyers:
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Exit-oriented mindset: PE funds generally only realise their returns upon selling the target, thus they view all investments through the lens of a future sale. PE funds study industry trends rigorously to identify which sectors will be hot in the medium-term (~4-8 years), and will target assets in markets they have high conviction in with the potential to generate stable cash flows.
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More valuation-sensitive: PE funds do not enjoy any material synergies while owning their acquired target and thus are less willing to pay a premium for it. A leveraged buyout (LBO) model, which PE funds use to evaluate a transaction, is often used to benchmark the minimum valuation the market is willing to pay.
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Significant use of leverage: PE funds optimise for Internal Rate of Return (IRR), the annualised rate of return an investor makes on their investment. A PE fund can increase their IRR by taking on more debt up to a certain point, since debt is cheaper than equity. However, the capital structure is a careful balancing act as too high of a debt burden may cause the target to be unable to repay the debt using its cash flows. PE funds often develop relationships with many banks who are eager to provide debt financing for their highly leveraged transactions.
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To illustrate how these concepts play out in practice, we will proceed to dive into two recent and prominent deals in the Southeast Asia PE market.
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Deal #1: Consortium's MYR 18.4bn Acquisition of Malaysia Airport Holdings Berhad (MAHB)
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Brief context
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In February 2025, MAHB was officially taken private by a consortium after 25 years listed on Bursa Malaysia for a consideration of RM 18.4b (USD 4.4b). MAHB is primarily known for operating the Kuala Lumpur International Airport via a long-term concession agreement awarded by the Malaysian government. It also (i) operates 38 other airports in Malaysia, and (ii) 100% owns and operates the Sabiha Gökçen International Airport, the secondary airport in Istanbul, Turkey.
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The consortium, named Gateway Development Alliance (GDA), consisted of (i) two Malaysian state-owned entities which are sovereign wealth fund Khazanah Nasional (Khazanah) and national provident fund Employees Provident Fund (EPF), and (ii) foreign investors which are the Abu Dhabi Investment Authority (ADIA) and global PE fund Global Infrastructure Partners (GIP).
Two valuation advisors in Hong Leong Investment Bank (HLIB) and UBS Singapore were appointed. While they did not play as comprehensive of an advisor role as detailed above, their involvement was critical to helping stakeholders determine a fair valuation. HLIB advised existing MAHB shareholders, while UBS Singapore advised the non-interested directors and independent non-executive directors acting in the shareholders’ interests.
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Deal rationale
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State-owned entities
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While Khazanah and EPF are technically financial buyers with a mandate to deliver returns, their investment theses are heavily shaped by the government’s strategic goals. The government was motivated by a desire to obtain a controlling share over KLIA to implement a large-scale operational turnaround. Once named the second-best airport in the world in the Skytrax global airport rankings in 2001, KLIA has fallen to 71st place in 2024. KLIA has been routinely criticised for having long lines at immigration customs due to low IT adoption, poor upkeep of toilets and amenities, and complicated arrival and transfer processes. Frustrations emerged internally as a senior expert commented that MAHB’s Board of Directors lacked the aviation expertise to understand and resolve issues. Moreover, MAHB’s listing led management to frequently favour profitability over sustained capital investment, such as paying out steady dividends from 2017-2022 despite criticism for slow progress of infrastructure upgrades.
Tourism is Malaysia’s largest employer and contributes ~15% of the country’s GDP. To boost a stagnating economy with weak domestic spending, the government developed the Visit Malaysia 2026 campaign to attract 35.6m tourists by 2026. The success of this initiative hinges on MAHB’s ability to invest in airport upgrades. The government has created conditions to incentivise MAHB to make more investments, primarily by introducing a loss capitalisation mechanism (LCM) for its airports in June 2024. If passenger service charges (PSC) revenue in each regulatory period (RPs, lasting between 1.5-2 years) fail to cover MAHB’s actual costs, MAHB can recover up to 90% of the shortfall in future RPs. However, as a listed entity, MAHB’s capex investment was capped at 11.4% of its regulatory asset base (RAB), the value of the assets used to provide airport services. By de-listing, MAHB is no longer restrained by a capex ceiling, better positioning MAHB to take advantage of the LCM.
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GIP
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GIP was brought in to provide operational and technical expertise of airport assets, having owned and operated renowned airports in major cities like the London Gatwick Airport, Edinburgh Airport and Sydney Airport.
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While GIP has historically shied away from airport assets in emerging markets, the privatisation of MAHB coincides with GIP’s subsequent 40% stake acquisition of Aboitiz InfraCapital, which operates several airport assets in the Philippines including its second-busiest airport. By acquiring a minority stake in both MAHB and Aboitiz InfraCapital, GIP seemingly intends to learn the market in a strategic investor role.
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Deal valuation
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GDA’s acquisition valued the company at RM 18.4b, translating to RM 11 per share at a 5.5x EV/EBITDA. We have prepared a selected list of comparable companies which operate airports in Asia-Pacific capital cities and are thus likely to attract similar levels of activity.
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The data reveals that MAHB is performing average to below average relative to its peers in the comp set. It has an EBITDA margin of 44% (median) owing to incurring relatively high maintenance and staff costs due to a slower modernisation trajectory. It also features a lower passenger yield (revenue per travelling passenger) of USD 8.6 (25th percentile), primarily due to (i) cheaper domestic prices and (ii) a smaller proportion of international passengers in KLIA (55.6%) as compared to tourist hotspots like Bangkok’s Suvarnabhumi Airport (81.3%).
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However, the acquisition EV/EBITDA multiple was 5.5x, placing it at a greater discount to both the median (16.3x) and 25th percentile (8.4x) than what their financial and operational metrics suggest. The multiple was also at a discount to their FY23 EV/EBITDA multiple at 9.0x while MAHB was publicly traded. Analysts project future EV/EBITDA to quickly rebound to >8.0x in FY25-FY26, further suggesting that the asset was underpriced.
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From GIP’s perspective, we believe that the following factors led to them believing in a discounted valuation:
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Significant capex needs: The government has estimated a capex package of USD 10b over the next 5 years to achieve their goals, more than 7x the amount invested over the previous 5 years. While MAHB’s FY23 net leverage ratio is relatively modest at 1.3x, the capex burden on top of any debt required to fund the acquisition will impede MAHB’s cash-generating potential. Due to MAHB’s lacklustre capex track record and the benefits of capex taking time to materialise, investors are likely to be less confident that the higher risk taken would produce a commensurate level of reward.
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Lower passenger willingness to spend: Malaysia draws more tourists from neighbouring Asian countries than their competitors Thailand and Singapore, which feature a greater international appeal. Tourists from other Asian countries generally are more conservative spenders as it costs less to travel to their destination. This is a major contributing factor towards MAHB posting a relatively low passenger yield.
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The consortium offer was also similarly undervalued by the price per share metric. HLIB advised shareholders that the RM11 per share offer undervalued the company against its estimated fair value of RM12.61 and RM13.71 per share, but was reasonable in the absence of competing offers. UBS Singapore estimated the fair value of MAHB at RM10.95-RM13.15, resulting in independent directors advising shareholders to reject the offer. Ultimately, the shareholders accepting the offer suggests that they saw little potential of a more favourable exit, as the lowball offer from the consortium with existing interests in MAHB would not inspire confidence in the market.
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Deal structure
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Khazanah and EPF holding a combined 70% stake in MAHB allows for the government to make critical executive decisions. GIP and ADIA’s combined 30% stake places them in a less precarious position. Not only can they test the waters of the Southeast Asian airport market with a lower equity commitment, but their smaller shareholding affords them greater liquidity as the pool of willing strategic investors is far larger than the pool of willing owners. If MAHB performs well, GIP will have several PE funds it can sell a success story to; if MAHB underperforms, GIP may still be able to exit to the state-owned alliance with a vested interest in turning around the asset.
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The transaction was executed via a consortium company, which in turn is owned by 3 SPVs (labelled as “HoldCos” in the “Post Deal” image) that the investors use to make their investments. There are 2 main benefits of using SPVs:
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Legal ring-fencing: The SPV is responsible for all debt obligations and liabilities arising from the investment, effectively shielding the investor from any liability. If the investment results in a default, creditors may only go after the SPV’s assets, but not the investor’s.
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Tax efficiency: SPVs are usually set up in jurisdictions with favourable tax laws which allow the investor to realise more of their profits. For example, GIP Aurea is set up in Singapore which does not tax capital gains, while GIP which is incorporated in the United States would have to pay between 0%-20% on capital gains.
Deal #2: Affinity Equity Partners' (AEP) USD 1.2bn Acquisition of PT Yupi Indo Jelly Gum Tbk (Yupi)
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Brief context
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In March 2025, Singapore-based PE fund AEP acquired a 90% stake in Indonesian jelly gum manufacturer and retailer Yupi for a consideration of USD 1.1b, valuing Yupi at USD 1.2b. The remaining 10% stake was concurrently listed on the Jakarta Stock Exchange (IDX) at an IPO raise of USD 123m.
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Founded in 1996, Yupi controls 66.5% of Indonesia’s soft candy market. The business started as a joint venture with leading European gummy manufacturer Trolli and grew into a regional powerhouse by producing high-quality, affordable gummies with mass market appeal. Currently, it sells its products in more than 50 countries in Asia, Australia, North America, Europe and the Middle East.
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Deal rationale
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While sector-agnostic, AEP has built a credible track record of investing in and scaling mass-appeal consumer businesses with robust margins. This philosophy is particularly reflected in their dual acquisition of Burger King’s Korea and Japan operations in 2016 and 2017 respectively, renowned fast-food chains with franchise agreements which reduce upfront costs. Having acquired both businesses for a combined USD 190m, AEP was reportedly looking to sell both businesses in 2022 at a combined USD 840m, which would have netted AEP a 4.4x MOIC in just 5-6 years. However, no transaction occurred due to a poor exit environment.
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AEP’s acquisition of Yupi is of a similar playbook. It is the clear market leader in Indonesia and even has strong regional appeal in neighbouring markets such as Singapore and Malaysia. Unlike many consumer brands, it is resilient to economic fluctuations, with its popularity among children as an affordable indulgence creating a sticky consumer profile. Its EBITDA margins have hovered around 22%-29% from FY21-FY24, both high and consistent for a consumer business. AEP also sees positive growth potential from both domestic and international drivers:
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Domestic – Growing consumer spending: Indonesia’s disposable income per capita is projected to grow at a CAGR of +4.3% from 2024 - 2029, underpinned by a large expanding middle class fueling discretionary spending and high rural-urban migration. As a household name in Indonesia, Yupi features a robust supply chain network to take advantage of any increased demand. It has a 97% penetration rate in local modern trade and has various production and packing facilities across Indonesia’s most populous island, Java.
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International – Strategic export focus: Yupi is progressively shifting sales to strategic overseas markets, with overseas sales growing to 27% of total sales in FY23 from 24% in FY22. Yupi’s exports focus on (i) countries with close geographical proximity which are easy to export to; (ii) Muslim-majority countries like Malaysia and UAE, since Yupi is already halal-certified to appeal to Indonesian consumers. The latter is a particularly significant growth driver, as Malaysia and UAE sales grew at a CAGR of 45% and 16% respectively from FY21-FY23.
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Deal valuation
The data reveals that Yupi is generally performing above average relative to its peers in the comp set. An EV/EBITDA premium (highest among the comp set) is justifiable given the following factors:
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Strong GP and EBITDA margins: Yupi exclusively specialises in one product category, which causes it to be in the 25th percentile for revenue compared to its more diversified competitors yet in the 75th percentile in GP margin and the leader in EBITDA margin. Its narrow focus allows it to maintain a streamlined supply chain by (i) sourcing a specific and proven ingredient formula, and (ii) incurring lower transportation and distribution costs. Additionally, candy tends to be a higher-margin product because its inputs are less perishable and easier to source than chocolate which is popular among its competitors.
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Low leverage: Yupi finds itself in a net cash position owing to its relatively low capex requirements, as it only owns 2 production facilities and 1 packaging facility. This metric implies Yupi is able to pay off their debt with purely their cash balance, even before factoring its earnings generation potential.
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While the significantly higher P/BV ratio paid for Yupi as compared to the comp set would normally suggest over-valuation, AEP likely sees it as justifiable given that the underlying value of Yupi lies in other factors beyond its lean asset profile. Moreover, AEP will be re-investing 77% of Yupi’s IPO proceeds into a new production facility in Nganjuk, East Java, thereby increasing future book value. It is likely that AEP has already factored in this future increase when ascertaining a fair value for Yupi’s book value.
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Post-IPO, the price per share significantly dropped by 29% from IDR 2,390 (25 March) to IDR 1,700 (31 October), causing the overall market cap to decrease by ~USD 35m. This is to be expected in landmark IPOs as the hype driving investor appetite usually subsides. While it could be argued that AEP views the current market cap as reasonable given that the consideration factors in a control premium, the decision to IPO concurrently is risky as AEP must recover the share price in preparation for a future exit.
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Deal structure
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The most unique feature of the transaction was the concurrent IPO which is typically seen as an alternative to buyouts. We believe that despite the immediate valuation drop, there were two key benefits to this decision.
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The first was to create a smoother exit channel in a time of uncertain PE activity. When the transaction was executed, PE deal flow in SEA was slow owing to high global interest rates, inflationary pressures and trade uncertainties. AEP learnt from their inability to exit their Burger King assets that a good asset does not automatically translate to a good exit. Establishing a public float allows AEP to offload shares progressively into the more liquid equity market, whereby each retail investor is not required to acquire a significant stake. AEP has employed this strategy, called “long goodbye”, with a previous investment in Tegel Foods. AEP listed it in an IPO in 2016 to sell nearly half of its shares before finding a permanent buyer in 2018.
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The second was to establish a more accurate financial picture of Yupi. Prominent Indonesian private companies eFishery, Tanihub and Investree have recently been embroiled in a number of high-profile financial scandals – eFishery faked financial data, while Tanihub’s and Investree’s executives pocketed investments for personal use. By listing on the IDX, Yupi is required to comply with disclosure policies and conduct comprehensive audits. This provides transparency and makes it easier for AEP to convince future buyers that Yupi’s financial metrics are reliable. The equity market is also able to set a market-verified valuation that AEP can use as guidance. AEP’s approach reflects its desire to reduce uncertainties in a market it is less familiar with.
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The deal was funded by leverage, as is typical of buyout PE deals. DBS was the sole Mandated Lead Arranger, Bookrunner and Underwriter. AEP has secured DBS as a core relationship bank, which many PE funds seek to obtain easier access to leverage at reasonable interest rates.
Authors:
Vernon Goh
Vansh Goel (Associate 25/26)
Uttkarsh Podar (Associate 25/26)
Nathania Chan (Analyst 25/26)
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Editors:
Caleb T K