(Corrects second paragraph to say Carlyle executives visited
the company in 2010, not last year)
* Carlyle, Farallon, China Cinda to buy $45 mln worth of
* Fu Shou Yuan to price IPO on Dec. 12, debut on Dec. 19
* Profits jumped 72 pct in six months to June from year
By Elzio Barreto
HONG KONG, Dec 9 Carlyle Group LP, hedge
fund firm Farallon Investors and China Cinda have agreed to buy
$45 million worth of shares in Fu Shou Yuan International Group
Ltd as China's largest provider of death-care services seeks up
to $215 million in a Hong Kong IPO.
Carlyle, whose co-founder William Conway visited Fu Shou
Yuan's main cemetery in Shanghai with a group of eight
executives in December 2010, agreed to buy $25 million worth of
shares, with San Francisco-based Farallon putting up another $10
million, according to the IPO prospectus unveiled on Monday.
China Cinda Asset Management Co Ltd, the country's
largest bad debt manager, will invest a total of $10 million
through two separate subsidiaries. The group of so-called
cornerstone investors receive a guaranteed allocation in
exchange for agreeing to retain their stakes for a set period.
Fu Shou Yuan launched the initial public offering on Monday,
offering 500 million new shares in an indicative range of
HK$2.88-HK$3.33 each, according to a term sheet of the IPO.
The IPO is set to price on Dec. 12, with a debut on the Hong
Kong stock exchange slated for Dec. 19.
The investors are looking to benefit from growth in an
industry forecast to reach nearly 100 billion yuan ($16.4
billion) by 2017 from an estimated 53 billion yuan in 2013,
according to market researcher Euromonitor. That's equivalent to
annual average growth of 17 percent in the period.
Burial services, which include tomb sales that have no price
controls, are the fastest growing and biggest segment of the
industry, expected to rise 17.9 percent a year through 2017. At
Fu Shou Yuan's Shanghai cemetery, for example, a six-by-six
metre plot can cost as much as 500,000 yuan at the top end,
including the tombstone and other services.
Funeral services, which include ceremonies and body
handling, are expected to expand 16.9 percent a year through
The boom in services should benefit from the increase in
China's elderly population and the number of deaths in the
coming years, the company said in its prospectus.
The number of deaths is forecast to rise to 10.4 million a
year in 2017 from 9.7 million in 2012, as the number of people
over the age of 65 grows to 14.4 percent of the population from
11.1 percent, Euromonitor estimates.
Fu Shou Yuan posted 118.14 million yuan of profit in the six
months ending June 30, up 72 percent from a year earlier, while
revenue grew 32 percent to 306.7 million yuan over the same
Citigroup Inc is the sole sponsor and global
coordinator of the offer, the term sheet showed, with CIMB
and UBS also helping to underwrite the deal.
The banks stand to earn up to $8.6 million, equivalent to up
to 4 percent of the proceeds, in commissions and incentive fees.
($1 = 6.0817 Chinese yuan)
(Reporting by Elzio Barreto and Yantoultra Ngui in Kuala
Lumpur; Editing by Michael Urquhart and Matt Driskill)