Hong Kong, July 5 - 3i Group Plc., Europe's biggest listed private equity firm, said on Wednesday it has led a $25 million investment in Little Sheep, an Inner Mongolian-based food chain with more than 700 outlets in China.
3i will take an undisclosed stake with co-investor Prax Capital, aiming to profit from China's rising consumer class and fund the roll out of new Little Sheep outlets in China and expand into international markets.
"The reason we like food and beverage so much is the lifestyle change in China, the increasing middle class and their consumer power," said Wang Daizong, a 3i vice president who focuses on China.
Little Sheep aims to go public, likely within two years, and could have a total market capitalisation of $500 million to $600 million by then, Wang said.
While the company is looking to branch out into other Asian markets -- and it has some outlets in North America -- Wang said the immediate focus would be China.
"It is the largest Chinese restaurant chain and a household name," he said. "We believe there's a lot more room for the company to grow."