KKR divests stake in China Modern Dairy for $80m

US private equity firm KKR has sold its remaining stake in China Modern Dairy Holdings for an amount totalling $80m.

While the company confirmed the sale, it did not divulge further information. The firm sold close to 168 million shares at HK$3.70 per share.

China Modern Dairy recorded an interim after tax profit of $88.7m, which the company said was an increase of more than three times on the 2013 figures.

KKR member Julian Wolhardt was quoted by Reuters as saying: "We are very proud of the partnership we have had with Modern Dairy since 2007 in supporting their efforts to provide safe and healthy drinking milk to Chinese consumers."

New York-based KKR is an investor with China Modern Dairy and private equity firm CDH Investment in Asia Dairy, a dairy farm venture that was established in 2013 with the aim of meeting China’s rising demand for premium milk products.

China Modern Dairy was bought by KKR and CDH after a 2008 scandal involving chemical-laced products affected the country’s milk industry. KKR bought the dairy for $150m, becoming a 34.5% stakeholder.

According to a previous report by Reuters, KKR tripled its original investment after Modern China’s 2010 IPO and the sale of a stake to Mengniu in 2013.

In the five years following the KKR and CDH investment, Modern China grew its herd from 24,000 dairy cows and three farms to around 180,000 dairy cows and 22 farms.