The international private equity firm the Carlyle Group yesterday announced a US$21-million investment in DIO F&B Group, creating a strategic partnership with the Chinese food and beverage restaurant chain.

The investment, funded by Carlyle Asia Growth Partners Group, or CAGP, will support DIO's franchise expansion, staff training and brand building, said a senior official with the Carlyle Group.

DIO F&B Group now runs more than 300 chain restaurants under the seven-year-old brand "DIO Coffee" in 23 provinces and cities across China. With the fund, the group expects to expand to 1,000 outlets within five years.

"DIO's sustained development and stable operation inspired our confidence in the company's adaptable expansion model and high growth potential," said Wayne Tsou, managing director of the Carlyle Group and head of CAGP. "Carlyle will leverage its expertise in the consumer and retail industry and rich brand building experience to help DIO excel."

Tsou said that as China's economy continues to prosper, he strongly believes in the increasing importance of grass-roots business models. But he declined to reveal how many shares Carlyle has purchased in DIO or estimate how soon the DIO might tap the public capital.

Wang Yangfa, president and founder of DIO F&B Group, said the alliance will focus on positioning DIO for its long-term future beyond mere capital raising.

"Together we will strengthen management, grow the brand and allocate resources effectively to ensure sustainable long-term growth," said Wang. "With this partnership, our goal is to help shape China's emerging leisure food and beverage industry."

(Shanghai Daily December 21, 2007)