Abstract

The Chevalier case demonstrates how a family-controlled and publicly listed group can make use of a listed company’s idle assets and turn them into a private equity-like endeavor generating better returns for all shareholders.

Founded in 1970, Chevalier Group was a Hong Kong-based conglomerate operating a wide range of businesses. It was a negative change in the fortunes of the IT products distribution business that had inspired Oscar Chow, Executive Director and son of the group’s founder, to enter the food and beverage (F&B) business in 2005. The purchase and subsequent sale of Pacific Coffee in June 2010 were landmarks to revitalize Chevalier Pacific Holdings Ltd under Chevalier Group.
While parts of the business showed strong growth and recorded healthy profits, others had reached their peak and were showing signs of decline. By late 2011, Oscar was devising a long-term strategy leveraging the group’s core competencies. What should the plan be and how should he implement it?
 

Learning Objectives

The learning objectives of the case are:
1. To identify differences between Mergers & Acquisition (M&A) and Private Equity (PE) / Venture Capital (VC) investment;
2. To identify and to evaluate elements and factors that constitute a sustainable PE investment model; and
3. To understand the influences on the investment decision making process of a family-controlled listed company.