Private equity biggies vie for Rs 400 crore VLCC stake

L Capital, the private equity arm of LVMH, the worlds biggest luxury goods group, is vying with Kohlberg Kravis Roberts & Co (KKR) to buy up to Rs 400 crore stake in homegrown slimming and beauty services chain VLCC, said at least two people familiar with the matter, adding that the company is worth more than $300 million. India-focused investment house ChrysCapital is another contender with the promoter, the Luthras, and existing investor Evertsone Capital short-listing three suitors, as they head for a final call in the next twothree weeks. VLCC is projected to end the current fiscal with a revenue of close to Rs 700 crore and an operating profit of around Rs 100 crore. Singapore-based private equity firm Everstone Capital, founded by two former Goldman Sachs bankers, has 16% interest in the company and plans to offload shares depending on the valuation. The promoter too could offer some shares to the new investors, who will come in with a significant minority ownership. The deal basically is to provide an exit to Everstone. And as a result, it hitches on valuation, said one of the sources cited earlier, adding that after the deal VLCC is expected to launch an initial public offering within one or two years to tap public funds. The Luthras, who hold just under 85% stake in VLCC, started life with a single outlet in a posh southDelhi locality some two decades ago and now runs over 200 centres in the country. JM Financial is advising the company on the current investment deal. Evertsone and the Luthras could not be reached for immediate comments. Another source said the recent surge in stock markets could prompt the Luthras and Everstone to keep alive the options of going public straightaway, if valuations offered by the three suitors dont match expectations. Consumer services companies like Talwalkars and Speciality Restaurants, which listed on the bourses more recently, have seen their shares gain in the current market rally, he pointed out, adding that global investors were returning to the domestic consumption story. L Capital, a strong contender to take the VLCC stake, has been bullish on the India consumer story for a while. Last year, it bought 8% stake in ethnic wear chain Fabinda from Wolfensohn Capital Partners. It also owns shares in fashion retailer Genesis Luxury Fashion and PVR Cinemas. Rising disposable incomes and the desire to look good are fuelling a 35% growth of the beauty services industry, which is largely unorganized. VLCC claims to be the leader in the countrys wellness space, which according to a recent FICCI -PWC report is said to be worth Rs 49,000 crore. The report said that companies are actively seeking public and private equity investments to fuel their growth. Source: Times of India 4th feb 2013

Everstone Capital picks Rs 220crore stake in Transpole

The logistics sector in India continues to see investments from large private equity (PE) investors. In the latest event, Everstone Capital, which has assets under management worth is $1.7 billion (Rs 9,141 crore), has acquired a significant minority stake in Transpole Logistics. The deal size is learnt to be around Rs 220 crore. Headquartered in New Delhi, Rs 500-crore Transpole has a presence across India and in other regions such as China, South Korea and South-east Asia. Founded in 2004 by logistics professionals Anant Kumar

Choudhary, Vivek Shukla and Praveen Chand Rai, Transpole is one of the leading freight forwarders in India. It offers logistics services in areas of freight forwarding, transportation, customs clearance, project logistics, warehousing and distribution. According to people aware of the development, Transpole plans to expand its international offices in China, Malaysia, Singapore and South Korea with the new funding. Also, it will explore opportunities in value-added services business such as and warehousing and distribution. Through this second round of funding, existing PE investor Fidelity Growth Partners will make a part-exit from Transpole. Fidelity had invested about Rs 60 crore in April 2011. Confirming the development, Dhanpal Jhaveri, chief executive officer and partner at Everstone Capital, said: The company is led by a highly entrepreneurial team and is at a very promising phase. We like the sector and are confident that we will be able to scale up Transpoles business in India and overseas. The year 2012 witnessed about 14 deals worth $281 million in the logistics space in India, against 10 deals worth $195 million in 2011, according to data from VCCedge. The sector has witnessed 88 deals worth $1.4 billion since 2007. Everstone, which runs two PE funds, has made its investment in Transpole through the second fundthe $580-million Everstone Capital Partners. Other investments from a second fund include YLG Salon, S Chand Publications, Sohan Lal Commodities and Crystal Crop Protection. The first fund the $425-million Indivision India Partners, raised in September 2006 made investments in companies such as Tikona Digital, VLCC, Tops Securities, Sula Wines, Lilliput, Capital Foods and Centrum Capital. According to a recent Deloitte and Indian Chamber of Commerce study, the market size of the logistics sector in India is in the range of $90-125 billion, and is growing at the rate of 15 per cent with sub-sector growing at even 30-40 per cent per annum. The largest PE deals in the Indian logistics space include General Atlantics $104 -million investment in Fourcee Infrastructure, Warburg Pincus $100-million investment in Chennai-based Continental Warehousing, KKR and Goldman Sachs $53-million deal with TVS Logistics and Blackstones investment in Allcargo Logistics. Source: Business Standard 4th feb 2013

Temasek, KKR eyeing stake in Alliance Tire

Private equity firms including Singapore state investor Temasek Holdings and KKR & Co are separately in advanced talks to buy Warburg Pincus LLCs majority stake in Indian tyre maker Alliance Tire Group for about $400 million, three sources with direct knowledge of the matter said. Other interested bidders include US private equity firms Advent International and TPG Capital, said the sources, all of whom declined to be named as the details of a possible deal are not yet public. Alliance Tire aimed to generate sales of more than $600 million in 2012, its website showed. US-based private equity firm Warburg Pincus, which invested in Alliance in 2007, is selling its roughly 72% stake in the company, the sources said, adding that final bids are expected to be invited by the end of this month. Two other minority investors may also sell their stakes in Alliance, giving the buyer roughly 75% of the tyre maker, two of the sources told Reuters on Friday. The company owns two manufacturing plants, one each in Israel and India, and has a sales presence in more than 120 countries, according to its website. Alliances tyres are also made at contract manufacturing facilities in China and Taiwan. Ashok Mahansaria, founder of Alliance Tire Group, did not respond to an email seeking comment. Warburg Pincus and Temasek declined to comment when contacted by Reuters, while KKR, Advent and

TPG did not immediately respond to requests for comment. Reuters Source: DNA India 19th jan 2013

Canbank VC invests in Scotts Garments

Canbank Venture Capital Fund Limited (CVCFL), a subsidiary of Canara Bank, has picked up 6.11 per cent stake in Bangalore-based Scotts Garments Limited for Rs 20 crore. The CVCFL has made the investment through its Emerging India Growth Fund, a Rs 500 crore fund. Scotts Garments, promoted by Naseer Ahmed in 2002, is a 100 per cent exp-ort oriented unit with readymade garment manufacturing facilities at Bangalore and processing unit at Tirupur in Tamil Nadu. The company has been exporting garments to several global brands including Jack & Jones, Veromoda, Only, Marks & Spencer, American Eagle, H&M Hennes & Mauritz, Perry Ellis, Benetton, Walmart and Carrefour among others. The company, which is coming out with an initial public offer (IPO) to raise Rs 155 crore in January 2013, plans to part finance the setting up of new units for trouser manufacturing at Doddaballapur in Karnataka, knitting and fabric processing unit at Kagal in Kolhapur district of Maharashtra. We are already operating 21 manufacturing units in Karnataka and Tamil Nadu. We are investing Rs 300 crore to expand our manufacturing capacities in Karnataka and Maharashtra. We will use pre-IPO and IPO proceeds apart from term loans from Canara Bank to fund our expansion, Naseer Ahmed, managing director, Scotts Garments Limited said. He said the company would manufacture 25,000 pieces of denim garments per day at its new factory in Doddaballapurs apparel park near Bangalore. The company has acquired 15 acres at the park from the government. The unit will be operational in April 2013. Another unit planned in Kagal will have a processing capacity of 40 tonnes per day. We expect a huge market to open up for domestic garment companies once India signs the Free Trade Agreement with European Union. We want to be ready with new capacities to exploit the opportunities coming up, Ahmed said. The company, which reported a topline of Rs 500 crore in 2011-12, is looking at a growth of 10 per cent for the year-ending March 2013. Source: Business Standard December 30th, 2012

Info Edge India invests Rs.5 crore in www.happilyunmarried.com

Info Edge (India) Ltd has invested an amount of Rs. 50 million (Rs. Fifty million) through optionally convertible cumulative redeemable preference shares in Happily Unmarried Marketing Private Limited for about 25% of the Company, on a fully diluted and converted basis.

The Company is engaged in the business of designing & selling fun products through offline stores and will also now be expanding its online business through its website www.happilyunmarried.com. Source: Equity Bulls November 11th, 2012

PE firm NSR likely to buy India rights of Nandos

Food connoisseurs arent likely to forget the taste of flame -grilled peri-peri chicken in a hurry. But Nandos, a South African restaurant chain of Portuguese theme, will see its India rights acquired by a new owner shortly, said people familiar with the matter. Private equity firm New Silk Route (NSR) is likely to acquire 74% stake in Nandos Indage Restaurants, a group company of the pioneering wine maker Shamrao Chougule family, which controls the financially troubled Indage Vintners. The $1.4-billion NSR has set aside $100 million to build a platform of restaurant assets and had acquired controlling interest in south Indian fast food chain Adigas earlier this year. Sources said Chougule family will retain a minority stake in Nandos, which they had launched with much fanfare eight years ago. NSR declined to comment while Indage Group director Ranjit Chougule did not respond to phone calls. A source mentioned above said discussions were advanced but no final deal has been struck. Source: Times of India November 11th, 2012

Standard Chartered PE to invest $35 mln in Indias Prime Focus

Private equity arm of Standard Chartered Plc will invest $35 million in Indian visual entertainment services group Prime Focus Ltd at a maximum price of 53 rupees per share, the Indian firm said. In addition, the company will issue warrants to the promoter Namit Malhotra, representing a right to subscribe to equity shares, for an aggregate amount of 1.04 billion rupees ($19.57 million) on preferential basis. These warrants are convertible into equity shares at a maximum price of 53 rupees per share, Prime Focus said. The funds will be used to support future growth plans of the company, Prime Focus said. Earlier this week, Standard Chartered Private Equity invested $32 million in Indias Varun Beverages. Source: Reuters November 11th, 2012

PE majors in race for stake in Transpole

The Indian logistics sector is turning out to be a hot destination for private equity investors, with the government allowing foreign direct investment (FDI) in multi-brand retail. In a recent development, three private equity (PE) majors said to be ChrysCapital, Everstone Capital and Tata Capital have joined the race to acquire minority stake in Delhi-based Transpole Logistics, a Rs 500-crore company with presence across India, China, South Korea and Southeast Asia. Avendus Capital is advising Transpole on the sale of stake. According to sources in the know, through the second round of funding, PE investor Fidelity Growth Partners would make a part-exit from its investment in Transpole. In April 2011, Fidelity had invested about Rs 60 crore in the company. Through the second round of funding, Transpole is likely to raise about Rs 200 crore. A mail sent to the Transpole management did not elicit any response. A spokesperson from Avendus Capital said, As a matter of policy, we do not comment on deal queries. However, a Tata Capital spokesperson said the company was not doing any such transaction. Other PE firms did not respond to Business Standard queries. In 2004, logistics professionals Anant Kumar Choudhary, Vivek Shukla, and Praveen Chand Rai founded Transpole Group. In 2010, the group appointed Phillip Ng, former managing director of Fedex AsiaPacific, as managing director (Far East). So far this year, the logistics space has seen 11 deals worth $232 million, against 10 deals worth $195 million in 2011, according to data from VCCedge. Since 2007, the segment has recorded 84 deals worth $1.3 billion. K Ramakrishnan, executive director, Spark Capital Advisors, said, There is a direct correlation between the economy and freight movement and, therefore, the logistic business. Though this sector is fragmented, with too many small companies, reasonable sizes are being capitalised, as more companies and investors are entering here. According to a recent study by Deloitte and the Indian Chamber of Commerce, the market size of the logistics sector in India is $90-125 billion. Sources estimate the industry employs about 45 million people and is growing at 15 per cent. Due to its current growth, as well as growth potential, the Indian logistics sector is viewed as one of the most attractive in the world, the study said. In January, General Atlantic had made one of the largest investments in the logistics space, investing $104 million in Fourcee Infrastructure. In April 2011, US-based PE major Warburg Pincus invested $100 million in Chennai-based Continental Warehousing. Other major deals in this space include KKR & Goldman Sachs $53 -million deal with TVS Logistics and Blackstones investment in Allcargo Logistics. Source: Business Standard November 11th, 2012

States first private equity deal gives 25 cr boost to education

Gujarats first private equity deal in education sector, Kaizen Private Equity LLC has picked up an undisclosed stake by investing Rs 25 crore ($4.5 million) in Ahmedabad-based Altus Learning Private Limited, which runs CalorX brand of schools. Altus, which is promoted by educationist Manjula Pooja

Shroff, currently manages 16 schools, mostly in Ahmedabad. We chose Altus because it is instrumental in supporting schools with 6000 students and offers quality education, said Sandeep Aneja, founder and managing director of Kaizen Management Advisors. Kaizen is one of Indias first education-focused private equity (PE) funds, which closed its maiden fund at nearly Rs 400 crore in June this year. Altus plans to increase this network to more than 30 schools growing its student base from current 7,500 to 17,000 in the process. The funds would be used to expand the schools under its network across western and northern India. Altus aims to focus more on the competent K-12 segment while continuing to add playschools. It will also add existing schools under its network besides working on new projects. While the company is involved in providing services to help set up new schools and manage them, it is not involved in owning school infrastructure. Education is an under-capitalised sector, which needs both finance as well as human capital. Education is at the core of consumption of every family, Aneja said. Besides Altus, Kaizen had previously invested in distance education provider Universal Training Solutions (UTS) and a corporate day care services firm, Your Kids R Our Kids (India) Pvt Ltd. On October 10, 2012 Kaizen disclosed a Rs 24 crore investment in Bangalore-based Ace Creative Learning Private Limited. The reason that PE firms are attract ed to education is that the sector is less susceptible to market forces and the return of investment is better. Besides, it makes a social impact and also benefits the society, said Aneja. Source: Times of India October 15th, 2012

Everstone invests Rs 200 crore in publishing house S Chand

Private equity major Everstone Capital today said it has invested Rs 200 crore in a leading publishing house S Chand and Company. S Chand is one of the largest educational publishing houses in India. With widespread dis tribution, experienced management and strong macro tailwinds, it is uniquely positioned to consolidate the market and deliver the necessary content to students and educational institutions across India, Everstone Capitals Managing Partner Sameer Sain said in a release issued here. The education publishing market in the country is pegged at USD 1.8 billion and is estimated to be growing at 15-20 percent annually. There is a huge demand for K-12, competition, and technical books, and increasing number of schools are moving towards private publishers. Also, the job market in independent professional sectors such as engineering, banking, etc is growing steadily. We want to continue to focus on our strengths in analytical, quantitative and, verbal reasoning, S Chand Group Vice Chairman Dinesh Jhunjhnuwala said. S Chand Group Joint Managing Director Himanshu Gupta said with digitalisation of the print medium, this investment by Everstone Capital is significant as it will help us strengthen not only our core business of publishing, but also help us reach a rapidly growing internet savvy population. Details of the transaction like the quantum of equity being offered to Everstone were not revealed. Source: Indian Express October 15th, 2012