(Bloomberg) -- KKR & Co. is considering options including bringing in fresh backers for Sylvan Inc., the world’s largest producer and distributor of mushroom spawn, according to people familiar with the matter.
KKR is working with an adviser to sound out investor interest in a so-called continuation fund denominated in yuan, the people said, asking not to be identified discussing a private matter. Deliberations are at an early stage and may not lead to any transaction, said the people.
A representative for KKR declined to comment.
Private equity firms are at times opting for continuation funds as tight financing and market volatility make some traditional exits via initial public offerings or outright sales more challenging. Centurium Capital Partners has been considering bringing in investors for a continuation fund for Starbucks Corp.’s Chinese rival Luckin Coffee Inc., Bloomberg News has reported. Middle Eastern and Chinese sovereign wealth funds are considering investing in McDonald’s Corp.’s China business, people familiar with the matter have said.
Sylvan was acquired by Jiangsu Yuguan Modern Agricultural Science & Technology Co., a KKR portfolio company that produces fresh mushrooms in China, according to an announcement in 2018. The two companies have continued to operate independently under their respective management teams.
Sylvan began growing mushrooms and making spawn in the 1920s and has facilities in 16 locations serving 65 countries, according to its website.
KKR has been very active buying and selling businesses in Asia this year. It plans to acquire Fuji Soft Inc. in Japan, Bloomberg News has reported. EQT AB agreed to buy PropertyGuru Group Ltd. from investors including KKR and TPG Inc. KKR has also been reviewing options for a number of portfolio companies in the region, including commercial lighting manufacturer NVC Lighting’s China business and Metro Pacific Health, the biggest private hospital operator in the Philippines.
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