GE Shipping, Great Offshore, Garware Offshore in race to buy Scottish offshore company SBS Marine

Great Eastern Shipping (GE Shipping), Great Offshore (GOL) and Garware Offshore are vying to buy Scottish offshore company SBS Marine. Norwegian company Viking Supply Ships is the parent of SBS Marine. Investment banking sources put the deal size to be around $200 mn.

SBS Marine owns five platform supply vessels (PSVs), and is building another PSV at a Norwegian yard. In August, Viking had acquired 100% of the share capital of SBS Aberdeen, the parent company of SBS Marine (SBS), for an undisclosed sum. Sources said the offshore asset prices have skyrocketed over the past few months, and Viking may want to cash in on the boom. The bids were invited by a consortium — including a legal firm, broker and a financial advisor, all based in Norway. Sources said two UK-based shipping companies have also bid for SBS Marine.

Sources say that all three Indian companies had given non-committal bids a month ago, and were short-listed by Viking. The bidders are now expected to complete their due diligence soon, and submit final bids. The assets of SBS Marine are worth around Rs. 700 crores. The company also has some debt to be paid off.

Bharat Sheth and Vijay Sheth recently split ways after the GE Shipping de-merger. Currently, Bharat takes care of the management of GE Shipping, while Vijay is in charge of the de-merged entity GOL. GE Shipping is believed to have submitted a bid through its wholly-owned subsidiary Greatship (India). GE Shipping is the largest private shipping company in India, sitting on huge cash reserve, and is planning the acquisition through a mix of internal accruals and debt.

Garware Offshore is also looking at ‘yard sale’ to raise funds for the acquisition. The company is currently building three new PSVs at a cumulative cost of Rs. 320 crores, and may look at selling one or two at a premium to amass the required funds for the acquisition of SBS Marine.

Read The Economic Times article.

Mumbai-based software company Core Projects plans two US buyouts

Core Projects, a Mumbai-based IT company involved in education projects, is about to acquire Aarman, an ERP software company and SkyBridge. Both companies are US-based. The deal size for Aarman is estimated to be around $8 mn; it has revenues of around $10 mn. SkyBridge may be bought for $8-10 mn. Announcements are expected in the first week of January. A third acquisition in the UK is said to be at a preliminary stage.

Core has raised funds for these acquisitions through a recent FCCB issue. The company had issued 1, 225 FCCBs of $10, 000 each in November 2006. The issue had collected Rs. 56 crores and the bonds have been listed on the Singapore Stock Exchange.

The company now has a kitty of Rs. 100 crores which includes FCCB proceeds and internal resources. Financial majors including Morgan Stanley, Deutsche Bank and Goldman Sachs have converted the bonds into equity and have picked up a 10% stake for $8.75 mn. The stake has been acquired following the conversion of the FCCBs by financial majors at Rs. 315 per share for Rs. 10 each, against the FCCB price of Rs. 310. The Core scrip closed at Rs. 469 on Thursday on BSE.

Morgan Stanley has the largest share at 4.03%, Grants (a Goldman Sachs subsidiary through which they will hold the stake) has 3.46% and Deutsche Bank has 2.59%. FCCBs worth $3.5 million still remain for conversion.

Core is present in verticals like education, pharmaceuticals and bio-science. The company, however, has a strong focus on education. It essentially maintains management information system for government-aided schools. Based on the data collected it devises solutions and analyses drop-out rates among students. Recently, it had bagged a Rs 25-crore project from the Jharkhand government to maintain education records of state government schools.

Read The Economic Times article.

Aurobindo Pharma all set to buy a company in The Netherlands

DNA Money reports that Aurobindo Pharma is all set to announce the acquisition of a formulations company in The Netherlands that will speed up the company’s European strategy. The board of directors has already approved the proposal and the deal will be announced on Friday subject to finalization of the price, say industry sources.

The transaction value is expected to be upwards of $20 mn. This will be the second European acquisition by Aurobindo Pharma after the acquisition of MilPharm in February 2006. The company being acquired has several marketing authorizations and will enable Aurobindo to expand in the market much faster apart from getting clearances for rest of Europe much faster. The acquired company had rights to 103 third-party products which were transferred to Aurobindo.

MilPharm, which had sales of 7.7 mn in 2005, was useful in front ending the company’s foray into the UK generics market where margins are much higher than in the US.

ADAG-Shringar acquisiton talks fall out over valuation differences

The Anil Ambani led-ADAG group is in the news for another merger and acquisiton deal, and it seems that this may also go sour. Negotiations between ADAG and the Shroffs of Shringar Cinema for buying out Shringar seem to have hit a roadblock due to differences on the price that ADAG has reportedly offered to Shringar’s shareholders.

Reliance-ADAG was willing to offer Rs. 58 per share and an additional Rs. 15 was offered for a non-compete agreement to the Shroffs, promoters of Shringar Cinemas. The clause was to ensure that the future plans of the Shroffs don’t affect the Reliance-ADAG group, which already has an interest in the sector through Adlabs Films.

The deal would make Adlabs Films the biggest player in the multiplex business along with the Delhi-based PVR, which currently has close to 75 screens across the country. The acquisition would give Adlabs access to Shringar Cinemas’ approximately 35 screens, putting Adlabs at a total of about 78 screens pan-India.

It has been learnt that large stakeholders in Shringar Cinemas had expressed reservations on the differences in the price offered by ADAG to the promoters and to shareholders. Temasek Holdings, one of the largest shareholders in Shringar Cinemas with close to 14%, expressed its reservations on the pricing, even when the Shroff family had agreed to this deal in-principle. The owners of Shringar Cinemas have been in talks with large players, including the Mukesh Ambani-led Reliance Industries, but the talks had failed, again, due to valuation differences.

While the deal is off now, it is expected that talks between both parties could resume, as a consolidation in the multiplex space is inevitable. Shringar runs the Fame brand of multiplexes and plans to add seven to nine multiplexes each year to touch 227 screens across 50 sites by March 2011.

Read he article in The Economic Times.

TCI exploring financing options for Rs 450 cr expansion

Transport Corporation of India (TCI), an integrated supply chain and logistics solutions provider, is considering a private equity placement to fund its Rs 450 crore expansion plans, reports Business Standard.

The company is also exploring qualified institutional placement (QIP) mechanism and foreign currency convertible bonds (FCCBs), besides private equity placement.

The company will raise Rs 125 crore through equity, Rs 129 crore through debt and the balance via internal accruals.

The funds will be utilized for expanding the capacity of its various divisions in the next four years. The company plans to invest Rs 150 million for expanding its warehousing capacity, Rs 100 crore for acquiring one ship and Rs 500 million in wind power generation.

As part of future plans, it is also looking to diversify its business into running container trains, following the relaxation of container rail operations by the railways.

Read article from Business Standard

UB builds war chest of $500 mn-$1 bn for overseas acquisitions

United Breweries (UB) has allocated $500 mn to $1 bn for overseas acquisitions, an important part of its growth strategy, said UB Group President & CFO Mr. Ravi Nedungadi. Mr. Nedungadi said so in the post-meeting address to the media, on the occasion of group company Shaw Wallace’s 60th AGM.

Mr. Nedungadi’s remark is to be seen in the light of reports of UB trying to acquire Scottish firm Whyte & Mackay. Mr. Nedungadi neither confirmed nor denied developments with regards to this issue.


Read The Economic Times article for more details.

OnMobile buys out ITFinity

OnMobile, a provider of ring tones and mobile-commerce services, has made a 100% buyout of ITFinity, reports The Economic Times. ITFinity is a specialist software company. The transaction value is around $15-20 mn.

The investors of ITFinity represent a who’s who of the private equity world. These include Rajat Gupta of McKinsey & Co, Ashish Dhawan of ChrysCapital, Luis Miranda of IDFC, Mumbai-based Edelweiss Capital and Rajesh TS Reddy, former founder of Unimobile.

OnMobile has the backing of IT giant Infosys. In October 2006, Deutsche Bank, Goldman Sachs and Polygon Investment Partners acquired a 10% stake in OnMobile for about $27.8 mn, valuing the company at $270 mn.

M&M, TAFE eye Actis’ 29% in Punjab Tractors

Actis’ 29% stake in India’s most profitable farm tractors and forklifts company, Punjab Tractors Limited (PTL), is probably up for sale. Mahindra & Mahindra (M&M) and Tractor & Farm Equipment (TAFE) seem to be the interested parties. The Burman family of the Dabur group, which holds 14% in PTL, may also exit along with Actis.

Actis’ stake is valued at Rs. 410 crores, but the buyer may also have to pay a control premium. It would also have to make an open offer to the remaining shareholders.

Read the complete Economic Times article.

3i Infotech eyes companies with products in insurance

3i Infotech is looking for acquiring companies with software products in the life insurance or trade finance verticals. 3i Infotech, formerly known as ICICI Infotech, is a leading provider of software and IT solutions, including packaged applications for the banking, financial services and insurance (BFSI), manufacturing, and retail and distribution industries. It has already made 19 acquisitions so far, having bought, earlier this year, majority stake in Professional Access and E-Enable.

The company is also keen to acquire domestic Business Process Outsourcing (BPO) firms that offer expertise cheque truncation, credit verification, soft recovery and soft collections. The company is in preliminary stages of talks with potential candidates.

For more details, read The Economic Times article.

ICICI Ventures plans bigger investments

Dec 26, 2006

ICICI Ventures, the private equity arm of ICICI Bank, and one of India’s leading private equity firms, is planning to raise the size of investments, to counter competition from other PE firms, banks, securities markets, hedge funds and other investment sources to fund Indian companies as accelerating economic growth pushes up stock valuations. Where earlier the size of investments would range around $25-30 mn, the firm now intends to buy stake as large as $125 mn.

More on this on Bloomberg.com.

Mumbai-based Rama Pulp and Paper acquires newsprint company

Mumbai-based cultural and specialty paper maker Rama Pulp and Papers is acquiring a newsprint company for Rs. 60 crores. The deal will be funded by an undisclosed foreign fund. Rama Pulp has declined to name the target company and the foreign fund owing to confidentiality clauses.

The fund will provide Rs. 50 crores for the acquisition while the rest will come from the company’s internal accruals.

Opportunities in newsprint and its low costs have attracted foreign players too, with majors such as Stora Enso and UBA mulling options to build a plant in India mainly to cater to the local market.

Of late, foreign funds’ interest in the Indian paper sector has been growing steadily. IFC, the investment arm of the World Bank is already in collaboration with West Coast Paper, JK Paper and AP Paper. Other firms like Goldman Sachs are more keen on picking up equity stakes in Indian paper companies as an 8% growth in the local economy makes paper all the more attractive.

Read the complete article from The Economic Times.

Citigroup proposes $5 bn infrastructure fund; to tie up with IDFC

Global financial services major Citigroup is in talks with the Indian government to start a $5 bn debt and equity infrastructure fund in partnership with Infrastructure Development Finance Company (IDFC). Blackstone had also proposed a fund for infrastructure in India, the size of which is not known. Citigroup has proposed a total fund of $5 bn, of which $2 bn is intended to be equity and $3 bn for debt. Citigroup would operate the fund in association with IDFC. Citigroup CEO Charles Prince had proposed the fund at a meeting with Finance Minister P Chidambaram in New York earlier this year.

More details on The Economic Times.

Delhi-based lighting equipment company scouting for acquisitions in the US

Indo Asian Fusegear Limited (IAFL), a Delhi-based switchgear and lighting equipment maker is looking for acquisition opportunities in the US in the range of Rs. 100-150 crores. The company has created a war chest of Rs. 100 crores for financing the acquisition. However, the company has declined to mention names of parties it is involved in talks with, saying that it is early to divulge details.

For more details, read The Economic Times and Business Standard articles.

UTI VF invests $10 mn in Shriram EPC

UTI Venture Funds has invested $10 mn in Shriram EPC. Shriram EPC operates in the high-end engineering services sector and offers multi-disciplinary design, engineering, procurement, construction and project management services to sectors such as power, metallurgical, pipelines for water system and cooling towers.

Shriram EPC had earlier received Rs. 30 crores and Rs. 100 crores from ChrysCapital and Bessemer Venture Partners, respectively.

UTI Ventures had previously invested in this sector by way of investing Consolidated Construction Consortium which is into urban infrastructure.

UTI Ventures has been furiously investing from its Rs. 700-crore fund. During November itself, the company invested around $30 mn in 3 companies including Koutons Retail, VKL Spices and Laqshya, an outdoor media company.

Read the Business Standard article for more details.

IDBI Bank plans Rs. 1000-crore private equity fund

IDBI Bank is planning to float a private equity fund. The size of the fund will be Rs. 1000 crores and will invest in mid-sized companies, particularly those in the power sector.

The capital markets division of IDBI, IDBI Capital Markets, already has a Rs. 50-crore private equity fund rolling, raised from internal accruals. It made a Rs. 10 crore-investment to pick up about 5% stake in Coimbatore-based textiles company Vijayeshwari Textiles.

Read the articles from The Economic Times, The Financial Express and Zee News.

Yes Bank gets Rs. 120 crores from Swiss Re

Leading global re-insurer, the Zurich-based Swiss Reinsurance Company (Swiss Re) has bought a 3.57% strategic stake in the domestic private sector Yes Bank. Swiss Re has provided an equity infusion of Rs. 120 crores ($26.5 mn) by way of private placement. The paid-up share capital of the bank has now increased to Rs. 280 crores and the total capital base, including Tier-I & Tier-II capital, has now crossed the Rs. 1,000-crore mark.

Post- issue, the promoters’ holding will come down to 37.2% from 38.6%. Rabobank’s stake will fall to 19.3% from 20% and the holding of private equity investors including Citicorp International, Russell AIF and ChrysCapital to 17.9% from 18.5%.

Yes Bank plans to raise $150 mn of capital by March 2007.

For more, read the following Business Standard article.

Trikona Capital to invest $18 mn in Fortis Healthcare

Trikona Capital is investing to the tune of $18 mn in Fortis Healthcare, a company promoted by the founders of Ranbaxy Laboratories. Earlier, George Soros’ Soros Private Equity Partners and Blue Ridge Capital were believed to have invested $50 mn in Fortis to buy a 10% stake in the company. Fortis has filed for an IPO and intends to raise Rs. 730 crores from the issue.

Fortis needs the funds to further its expansion plans as well as to write-off the debt it had incurred while acquiring Escorts Heart Institute and Research Centre. Fortis Healthcare has chalked out some meg-expansion plans, partly through acquisitions, which will require investments of Rs. 2250 crores by 2010.

Trikona Capital is a real estate-focused private equity firm; it is planning to invest around $1 bn in the Indian market in the next one year. So far, it has made investments of up to $150 million in India. Apart from Fortis, Trikona’s investments include a minority stake in IL&FS Transportation and Networks for $10 million, $20 million in an integrated township project in Thane, $22 million in a residential project in Mumbai and around $55 million in an IT park in Greater Noida. The fund also has partnerships with HDFC and IL&FS to make investments in India.

Read The Economic Times article.

Seagate to acquire EVault Inc.

Seagate Technology LLC, the world's largest maker of hard-disk drives, has agreed to acquire EVault Inc., an online data storage service provider, for about $185 million in cash, as per a news release issued by the Company

Seagate, a $9.2 billion company that's based in the Cayman Islands but operates out of Scotts Valley, is expanding beyond its core business of making the disk drives that have long powered computers and more recently, electronics as well.

The move marks the biggest step yet by the largest maker of computer hard drives to boost its nascent storage services business. It would widen Seagate's service offerings in a growing arena fueled by the demands of companies and individuals to store and keep backups of massive amounts of digital data.

EVault, a privately held company based in Emeryville, specializes in providing automatic backup and data recovery services to small- to medium-sized businesses. It was founded in 1997, has more than 250 employees and serves more than 8,500 customers worldwide.

EVault is the most recent acquisition in the broader storage solutions area and the third for Seagate in the area of services. In 2005, it acquired Mirra Inc., a maker of personal servers that allow consumers or small businesses to easily upload and share files, and recover them later if needed. Seagate also acquired ActionFront Data Recovery Labs, a provider of professional data recovery services.

The deal with EVault is expected to close in Seagate's fiscal third quarter following regulatory approvals, the company said.Read article from Business Standard

SAIL eyeing coal properties in Canada and Australia

Steel Authority of India Limited (SAIL) is about to acquire a 30% strategic stake in Canada-based coal mines, Wolverine Coalfield, owned by the Western Canadian Coal Corporation (WCCC). SAIL has been offered a 20-30% stake in the mines located in North-East British Columbia and is currently negotiating with the WCCC.

SAIL is also eyeing coal properties in Australia, notably, Millennium Coal Mines in Queensland, which has 60 mn tonnes of coal and has offered 5% stake to SAIL, and Anglo Coal, which is yet to make a definite offer. Marcarthur Coal and Tiaro Coalfields, both of Australia, have also made offers to SAIL.

Read The Economic Times article for more details.

SABMiller may buy Mt Shivalik stake; EV seen at Rs. 300-350 crores

SABMiller Plc, the $14 bn beer giant, may buy a 50% stake or go for a complete buyout of Mt. Shivalik, the largest independent brewer in the country. The deal could carry an EV of Rs. 300-350 crores. Mt. Shivalik’s beer brand, Thunderbolt, has a 6% share of the growing domestic beer market. ABN-AMRO has the mandate from Mt. Shivalik to look for strategic options. Other global players like Carlsberg may also bid for the company.

Mt. Shivalik was recently offered $35-40 mn by Asia Pacific Breweries (APB), a Singapore-based arm of Heineken. Since then, its valuation has soared manifold. SABMiller had also placed a bid for majority stake in Mohan Meakins’ beer business after the promoter family invited business. However, the deal process has been in limbo for a while now. Earlier this year, SABMiller inked $120-million deal to buy the brand rights and beer assets of Foster’s in India giving it an additional 2% share of the domestic consumption.

With the acquisition of Mt. Shivalik, SABMiller can expect to see its market share jump to almost 44%, rather close to that of 45% of United Breweries. The Indian beer market has reported a growth of 25-30% in the current year.

More in The Economic Times article.

Matrix Partners India invests Rs. 20 crores in digital signage company vJive

Matrix Partners India has invested Rs. 20 crores in vJive, an out-of-home media and digital signage network owned by Digital Music India (DMI) Pvt. Ltd. has received a VC funding of Rs. 20 crores. This is the first of the tranches of an overall Rs 100 crores for the company. Matrix’s Avnish Bajaj has joined the board of directors of DMI.

This is Matrix’s fourth investment in the year. It had earlier invested $7 million in Seventymm.com, an online DVD rental company, $5.5 mn in Moods Hospitality, the owners of food chain Yo! China Restaurants, and an undisclosed sum in a stealth mode start-up Four Interactive.

Mahindra & Mahindra to buy German forging firm Schoneweiss

Mahindra & Mahindra (M&M) is acquiring 90.47% stake in Germany-based forging company Schoneweiss. Schoneweiss is one of the top five axle beam manufacturers in the world, and specializes in suspension, power train and engine parts. The acquisition would be through its subsidiaries. However, financial details of the transaction were not disclosed.

Read The Calcutta Telegraph article.

M&M has been quite active on the acquisitions front. Last month, it announced the acquisition of casting and ferrites firm DGP Hinoday Industries. Then, in September, M&M announced that it would acquire a 67.9% stake in Jeco Holding AG, one of the top five forging companies in Germany, for an enterprise value of Rs. 830 crores (€140 mn). Last year, M&M bought Rajkot-based SAR Transmission. This was followed by the Amforge Chakan unit and Stokes Forging of the UK.

India closes $9.5 bn worth of M&A deals; has 1.3% of global M&A transactions

Some $9.5 bn worth of M&A deals were closed in India for the year 2006, compared to $5.37 bn in 2005. India’s share in the global M&A deals stands to around 1.3%, up from 0.72% in 2005.

Indian companies accounted for 53 overseas buyouts valued at $3.91 billion, whereas foreign companies struck 60 deals worth $5.69 billion.

India was the 18th most preferred destination for bidders, while among buyers, India was 26th on this list.

Read the Business Standard article.

GHCL unit buys US firm HW Baker Linen for $6.75 mn

GHCL has acquired HW Baker Linen from US-based Best Manufacturing Goup for $6.75 mn, through a competitive bidding process. The acquisition was made through GHCL’s step-down subsidiary Dan River, Inc. HW Baker supplies textile products, amenities and guest room supplies to hotels and motels across USA, and had revenues of about $70 mn last year. This is fourth acquisition closed by GHCL over the last one year. It had earlier acquired Rosebys, a home textile retail chain in the UK, soda ash maker SC Bega Upsom in Romania and Dan River, a textile company in the US.

Read The Economic Times and Business Standard for more details.

Reliance Life close to $1 bn US buy; to invest £32.2 mn in UK-based GeneMedix

Reliance Life Sciences, the biotech arm of Reliance Industries Limited, may acquire a US company, operating in the genetics and nanotechnology space, for about a $1 bn, reports Business Standard.

In a related development, Reliance Life Sciences is planning to invest £32.2 mn ($63.2 mn) in UK bio-pharmaceutical company GeneMedix Plc. the initial investment will be made through subscription for around 1.1 bn shares at 1.25 pence to raise £14.6 mn, representing a controlling interest of 74% of the enlarged share capital of GeneMedix. Reliance may also further invest up to £17.5 mn in the company. Read Business Standard for more details.

Premier Tissues to acquire UK tissue converting company

Bangalore-based Premier Tissues, a manufacturer and exporter of tissue papers, is acquiring an UK-based tissue converting company in a deal worth £8-10 mn. In addition to the company’s bankers, Bank of India and the EXIM Bank have also shown interest in financing the deal. The company is also holding talks with a couple of venture capital firms to fund the deal. The acquisition is expected to be consummated by March 2007. Presently, Premier Tissues is one of the largest exporters of tissue products to UK. By February 2007, with this expansion, the company will be able to export about 700 tonnes of tissue products per month.

Read The Economic Times article.

It is to be noted that Bennett, Coleman & Co. (BCCL), the media group that owns The Times of India and The Economic Times, had recently picked up 6.42% stake in Premier Tissues. The company was set up in 1998 in technical collaboration with Premier Tissues of Malaysia. It now has a sales revenue of 35 crore, of which up to 25% comes from exports.

Marico acquires Egyptian hair care brand HairCode

Marico has acquired Egyptian hair cream and hair gel brand called HairCode from Cairo-based Pyramids Group for an undisclosed sum. This is Marico’s second big acquisition in the Egyptian hair care market, having earlier purchased another big Egyptian hair care brand called Fiancée in September 2006. Marico has refused to disclosed the size of the brand acquisition but has mentioned the deal size to be significantly higher than its present sales, currently at 41 mn Egyptian pounds, due to the high profitability of the brand.

Read the article from The Economic Times.

Lehman Brothers to invests in Delhi-based VAS provider Cellebrum

Delhi-based value-added services (VAS) solutions provider Cellebrum is getting funding from Lehman Brothers, reportedly to the tune of $15 mn. Cellebrum is the VAS arm of Delhi-based MCorp Group. The amount raised will be invested in the technological development of the company and for other R&D-related purposes. The firm is also panning to start an incubation fund wherein the money from the fund will be mainly used to takeover smaller players in the VAS segment or get into strategic tie ups to launch more services in the telecom sector.

More on The Economic Times.

Kotak Mahindra launches the Kotak India Focus Fund

Kotak Private Equity announced the launch of the Kotak India Focus Fund, an India-dedicated quasi private equity funds, which aims to invest in the listed mid-market equity space using a private equity approach. Kotak along with Principal Investment Manager propose to invest capital in the fund. The fund is looking to raise $200 mn from institutional investors and family offices. The approach towards investment will be to provide active post investment value add to investee companies. The fund will seek to provide advisory services with specific focus on mid-market companies – through financial advisory (capital re-structuring, fundraising) and strategic advisory (global industry trends / capital structures etc.). The fund is a 4+1 year closed-ended structure, with phased draw-downs and repayments.

Read the press release here. More on Kotak’s Fund at FINalternatives.com.

Evolvence to launch Indian private equity fund

Dubai-based fund-of-funds Evolvence Capital is launching an AIM-listed closed-ended FOF in January which will invest in Indian PE funds. The fund intends to raise $105 mn for the Evolvence India Fund. The FOF will invest in a number of closed-ended PE funds focused on the Indian infrastructure, pharmaceutical and retail sectors. UTI Ventures’ Ascent India Fund, Barings India Private Equity Fund II, IDFC Private Equity Fund II, India Value Fund II, IL&FS’ Leveraged India Fund and New York Life Investment Management India Fund II will be the initial beneficiaries of the fund.

Earlier this year, Evolvence had made direct investments into Emaar-MGF Land Private Limited, Centurion Bank of Punjab, Consolidated Construction Consortium Limited (an engineering and construction contractor) and Eastern Silk Industries Limited (a silk textile manufacturer). Also, sometime in the April – June quarter of 2006-07, Evolvence announced the launch of a $150 mn fund for investing in small- and medium-sized Life Sciences companies in India.

For more details, read the article from Citywire.co.uk.

Escorts in advanced talks for private equity

Dec 21, 2006

Tractor-maker Escorts Limited is looking for private equity funding to expand its construction equipment unit. The company is not disclosing the size of funding it is seeking but intends to seal the deal by February 2007. For the financial year 2006-06, it posted revenues of Rs. 350 crores. Nikhil Nanda, ED, Escorts said that the company would focus on construction equipment, tractors, railway parts and auto parts as part of its ongoing restructuring. Escorts sold it 49% stake in Carraro India to Italian JV partner Carraro for €20 mn. It had also sold a stake in Escorts Heart Institute and Research Centre to Fortis Healthcare Ltd. Escorts is using the proceeds from stake sales to repay its debts, which earlier stood at Rs. 1100 crores, now at Rs. 580 crores.

Read more in the article from Reuters.com and The Times of India.

Bates buys majority stake in Sercon

This is another BTL acquisition story. Bates Enterprise, which last year had acquired Enterprise-Nexus, has acquired a majority stake in Sercon, an Indian marketing services company with presence in India and South East Asia and catering mainly to IT clients, such as Sun Microsystems, Cisco, Nortel Networks and McAfee, offering them services on customer relationship management and channel marketing. Sercon will be integrated into 141 Worldwide, the below-the-line agency of Bates Enterprise. The joint entity will be called 141 Sercon. It has also acquired marketing a Chinese services company CSSP Jochnic, providing marketing solutions to consumer goods companies in China. Bates’ Indian operations have become the largest in the Bates network in Asia. Bates had set up its Indian operations two years ago and has grown in the region through acquisitions. The Sercon acquisiton and its proposed merger with advertising agency David will make Bates even bigger.

Read The Economic Times and Business Standard for more details.

ABB to acquire Raman Boards

ABB Group is about to acquire Raman Boards (RBL), a Mysore-based company manufacturing press boards and insulation components. RBL was established in 1979 in technical collaboration with Rogers Corporation of the United States. It employs around 300 people across 4 manufacturing facilities in India at Nanjangud (Mysore), Thandavapura (near Mysore), Sonepat (near Delhi) and Navi Mumbai. The acquisition would complement ABB's global insulation components capacity, which includes making insulation material for transformers, as well as electrical and mechanical components.

Read the article from The Economic Times and Moneycontrol.com for more details.

BTL-major IMS Group about to acquire 66% in Encompass

UK-based IMS Group, a $160 mn below-the-line (BTL) marketing services major, is negotiating to acquire a 66% stake in event management and promotions firm, Encompass, for Rs 36-45 crore. Encompass has been promoted by Roshan Abbas. The acquisition would be through its recently acquired Indian subsidiary IMS-Candid Marketing. This would be its second acquisition in India, after its acquisition of 66% stake in Candid for Rs 23 crore. BTL marketing involves activities such as promotions, internet, mobile marketing, exhibitions, point-of-purchase and retail merchandising; analysts gauge the BTL market to be around Rs. 10, 000 crores. The BTL marketing space in India is seeing major movements of late. Last year, Publicis bought 60% in Delhi-based marketing services company, Solutions. Similarly, Mudra Communications picked up 74% in Kidstuff Marketing.

Read The Economic Times for more details.

Vodafone also in the race for Hutch

After Reliance, Maxis, Bharti and Essar itself, the Hutch-Essar JV seems to have found a new suitor. It seems that Vodafone, the British telecom giant, is reported to bid for Hutch-Essar. UBS, which is Vodafone’s house banker, is said to be advising the company on financing and acquisition strategies.

Both Vodafone and UBS have refused to comment on the development.

Vodafone is selling its stake in its holdings across market as it faces severe investor backlash. It sold its 25% stake in Swisscom for about $3.5 billion and a similar stake in a Belgian wireless operator to Belgacom; before that it had exited companies in both Sweden and Japan. The Japanese transaction was valued at about $16 billion.

In India, Vodafone has invested in a 10% stake in Bharti Airtel, the value of which now is estimated to be around Rs. 16, 000 crores. Vodafone might consider selling its stake in Bharti for financing the acquisition.

Read the article from The Economic Times.

Gitanjali acquires US-based Samuels

Gitanjali Gems has acquired 97% stake in Samuels Jewelers Inc, the 10th largest jewellery chain in the United States, for Rs. 200 crore. Samuels operates 97 stores across 18 states in the US with current revenue equivalent to Rs. 450 crores. The acquisition has been financed through internal accruals and proceeds of a recently concluded $110 million FCCB.

Read Business Standard, Reuters and India Infoline for more details

AIG Capital picks up majority stake in Vivek Hire Purchase

American financial services giant AIG Capital Corporation, through its wholly-owned subsidiary has acquired a 75% stake in Chennai-based Vivek Hire Purchase and Leasing (VHPL) Limited for an undisclosed sum. VHPL is an unlisted NBFC promoted by Vivek Limited, one of India’s leading consumer durables retailers. VHPL provides financing for consumer durables bought from Vivek outlets, and going ahead under the new management, could broad-base its product offerings by getting into areas such as automobile, personal and home finance.

Read more about this news from The Hindu.

Shinsei Bank to set up mutual fund business in India

Another Japanese firm is planning to enter the asset management business in India. Shinsei Bank is reportedly forming an asset management JV with the South-based Andhra Bank. This is the second such announcement by a Japanese financial services company – earlier Nikko AMC had announced a similar kind of JV with the Ambit group. Shinsei will have a majority stake in the business. Shinsei had previouslyannounced a tie-up with UTI MF to invest $300 mn, raised from Japanese investors, in the Indian stock markets. Of late, many foreign funds such as Japan’s Mitsui, Korea’s Mirae, UBS, Aviva, Pioneer, etc. are planning to enter the Indian mutual fund space.

Read Business Standard for more details.

Ambani goes for the kill, to buy out Ruia's stake as well

Finally, Anil Ambani has made his intentions absolutely clear. Reliance Communications will buy out Hutch-Essar in its entirety. Nimesh Kampani, representing the Ruias is believed to have held meetings with Anil Ambani. Various parties as interested in buying out Hutchison’s stake in Hutch-Essar are doing the rounds of investment circles. These include Ruias themselves raising debt from banks and buying Hutch’s stake in the JV. Bharti’s Mittals are also heard to be interested in buying out the company. Even the name of the Tatas has been mentioned. Maxis, the Malaysian telecom company, is also set to bid for Hutch-Essar. The Ruias stand to gain around $4-5 bn if they sell their stake to Reliance Communications. Ruias are being advised by Morgan Stanley and Goldman Sachs. UBS is advising Ambani on the deal. Buyout funds like Blackstone, Texas Pacific, Carlyle and Kohlberg Kravis Roberts, among others, are supporting Reliance to structure the financing. With about $10 billion through cash to buy equity and around $2-4 billion as debt from major foreign banks, Reliance seems to be the frontrunner in getting the Hutch-Essar telecom business.

Read the article from Business Standard.

Lightspeed invests $29.5m in Bangalore net companies

Venture capital investors are making a beeline for India. Following Texas Pacific Group Ventures and Sherpalo, Silicon Valley-based venture capital fund Lightspeed Venture Partners, with $1.5 bn of assets under management, has invested in two Indian companies – Mercantila and TutorVista – both based in Bangalore.

Mercantila, a collection of hundreds of online specialty stores serving the US and Canadian markets, has received funding upto $22.5 mn, while online tutoring and test preparation company TutorVista has received $7 mn.

Lightspeed has recently raised a $475 mn fund, one-third of which would be invested in assets outside the US. Israel, China and India would be major recipients of this allocation. India itself may see investments in the range of $50-100 mn. Lightspeed is keen to make a mark in the growing Indian market and intends to establish an Indian office in the coming 12 months.

Read more in The Economic Times, Red Herring and ContentSutra.com.

Matrix Partners Invests In Stealth Start-up Four Interactive

Matrix Partners is making investments and news by the day. After investing $7 mn in Seventymm.com, an online DVD rental company and $5.5 mn in Moods Hospitality, owner of the Yo! China brand of Chinese food outlets, the $ 150 mn cross-sector fund has bought an undisclosed stake in Bangalore-based stealth mode start-up Four Interactive. As per the company website, Four Interactive is “building easy to use services which lie at the intersection of mobile, content and web”. Four Interactive has been founded by ex-Microsoft execs Kiran Konduri and Shriram Adukoorie. Kiran Konduri was the founder of Zephyr Software, later acquired by Infospace. Shriram Adukoorie is the former country head for MSN India and South Asia.

Makemytrip.com gets $13 mn from VC investors

Travel portal Makemytrip.com has raised $13 mn in a second round of funding. Helion Ventures, Sierra Ventures and existing investor SAIF Partners are the investors. The company has a projected turnover of Rs. 600 crores ($130 mn) for the current financial year, up from Rs. 200 crores ($42 mn) last year. Travel portals have been seeing a lot of money coming in of late. Recently, Travelguru.com raised $15 million from Battery Ventures and Sequoia Capital India. Cleartrip.com has also reportedly raised $8 million from DAG Ventures and Sherpalo Ventures.

Read ContentSutra.com for more.

S P Apparels to list in six months

Textiles seem to be the stocks to watch out for. SP Apparels earlier had acquired a private equity placement of $8 mn (approx. Rs. 36 crores) from global insurance major New York Life Insurance’s investment arm, New York Life Investment Management, from its NYLIM India Fund. The Rs. 200-crore company is now planning to hit the capital markets. SBI Capital Markets and IL&FS InvestSmart are the advisors to the issue, which may come out within the next six months. The company intends to raise around $82 mn (Rs. 370 crores) from the listing and divest 25% stake to the public, having previously offload around 10.71% stake to NYLIM India Fund. S P Apparels is expanding rapidly, having earlier acquired the domestic men's brand Crocodile in April last. It has also chalked up Rs. 370-crore, Phase-II expansion programme, covering its backward linkages in spinning, knitting, wet-processing, garmenting and retailing, including the cost of acquisition of the brand. Presently, the company exports 90% of its production; clientele includes major global garment retailers such as Mothercare, Tesco, Disney Stores, H&M, Benetton and Dunnes Stores. It is consistently posting 25-30% growth in the last three years has achieved a sales turnover of Rs 200 crore during 2005-06. Its sales during the half-yearly period ended September 2006 stood at Rs 120 crore.

Read article from Moneycontrol.com for more details.

Cairn India fixes issue price at Rs. 160

Cairn India, a crude oil and natural gas exploration and production company, has fixed its issue price at Rs. 160 per share. The low pricing is due to uncertainty in market conditions, and consequent weak response from investors. The company will now have to return nearly Rs. 335 crore to private equity investors, (PE) for pre-IPO placement done at Rs. 176 per share. The issue was oversubscribed just 1.14 times with QIBs portion subscribed 1.36 times, HNI 0.47 times and Retail 0.9 times. The company entered the capital markets with a public issue of 328 mn equity shares of Rs. 10 for cash at a premium to be decided through a 100% book-building process. DSP Merrill Lynch, ABN-AMRO Securities and JM Morgan Stanley were the book running lead managers.

Read Moneycontrol.com for more details.

SIDBI Venture to invest Rs. 30 crores in V&S International

SME Growth Fund of SIDBI Venture Capital Ltd. has invested 30 crores in Gurgaon-based textile manufacturer and exporter, V&S International Pvt. Ltd. The company supplies textiles and ready-made garments to retail chains in the US and Europe. SIDBI Venture Capital Ltd is the venture capital arm of the Small Industries Development Bank of India. It invests out of two funds, the SME Growth Fund and the Rs. 100 crore National Venture Fund for Software and IT Industry.
Of late, the private equity firms have shown a lot of interest in the textiles and apparels sector. KPR Mills, Koutons Retail are some of the firms that have received a round of PE funding.

Reliance Comm dials banks for Hutch deal

Anil Ambani is leaving no stone unturned to acquire the prized 67% stake of Hutchinson Whampoa in Hutch-Essar. As of latest reports, Reliance Communications has tied exclusivity agreements with a number of foreign banks, presumably, Citibank, HSBC, ABN-AMRO and UBS. This means that not only will these banks provide the necessary debt for the transaction, but the agreements will also prevent them from working with any other prospective or existing bidder. This agreement with the said four banks is crucial, as all have expertise in multi-billion dollar cross-border acquisition financing and their experience would have been of enormous use to rivals. RCL is already in talks with private equity funds such as Kohlberg Kravis Roberts & Co (KKR), Blackstone and Texas Pacific Group for equity financing.

For more, read the following articles The Economic Times, The Financial Express and Business Standard.

Zee Telefilms to raise up to Rs 900 crores via equity sale

Zee Telefilms is hitting the capital markets again. The company intends to raise around $200 mn (Rs. 900 crores) by diluting equity capital in two of its subsidiaries, 10% of Dish TV and 15% of Wire & Wireless India (WWIL), to part-finance expansion plans as a part of an ongoing restructuring programme. Zee plans to raise the money to acquire new customers and buy last-mile connectivity. The two companies are scheduled to be listed in February. Dish TV and WWIL are expected to raise Rs. 400 crores and Rs. 500 crores, respectively. The fund generation suggests a valuation of Rs. 4, 000 crores and Rs. 3, 000 crores for Dish TV and WWIL, respectively. The Bombay High Court has approved the de-merger of cable undertaking of Zee Telefilms into WWIL and the regional and news broadcasting undertaking into Zee News Ltd. ZTL would start trading from December 18 as the de-merged entity, to be renamed Zee Entertainment Enterprises.

For more details, read the article from The Economic Times.

NYMEX initiates talks to acquire 9% stake in MCX

Multi-Commodity Exchange (MCX), whose IPO is one of the most looked forward to, is about to bring in a new strategic investor. The New York Mercantile Exchange (NYMEX) is said to be in discussions with MCX for a 7% stake. Earlier, Fidelity International had picked up 9% stake in MCX for $49 mn (Rs. 220 crores). Merrill Lynch is the advisor to MCX on the deal, as well as the manager to the issue. The deal may be valued anywhere upwards of $60 mn (Rs. 270 crores). Both exchanges have declined to comment on this issue. NYMEX had earlier tried to acquire ICICI’s 7% equity stake in NCDEX, which eventually went to Goldman Sachs. Founded by Financial Technologies India, MCX is India’s largest commodity exchange. It accounts for 56% of the total Indian commodity and futures market with an average daily turnover of about $1.5 billion. Indian exchanges are waiting for clarity on the FDI norms for exchanges, even as the government formulates the policy on foreign holding in Indian commodity bourses. SEBI recently issued guidelines for the BSE, proposing a cap of 49% on foreign holding, which includes 26% FDI and the balance 23% for FIIs. Industry anticipates that SEBI would maintain these norms for commodity exchanges in the country as well.

For more details, read the article from The Economic Times.

TravelPort India acquires domestic tour operator

After Thomas Cook’s acquisition of Travel Corporation of India, here’s some more M&A news in the travel sector. Mumbai-based TravelPort has acquired Shree Balaji Tours for an undisclosed sum. TravelPort is one of the largest franchisee travel houses in the country, with 65 franchisee outlets in 8 cities and a turnover of Rs. 60 crores. Shree Balaji Tours has a network of 400 agents and offices in five cities and close to 90% of its Rs 20 crore turnover last fiscal came from hotel sales for Goa. TravelPort has the backing of strategic private equity investors; this particular transaction has been funded using equity and cash. With this acquisition, TravelPort has become the largest domestic tour player in Goa. Javed Akhtar, CEO, TravelPort, says that Rs. 50 mn will be invested in Balaji to fuel expansion plans in Goa, including promotion of tourism, and underwriting of hotel properties in Goa. TravelPort is looking forward to more domestic acquisitions in the future, notably in the Kerala tourism space.

For more, read the article from Daily News and Analysis.

DE Shaw to invest Rs 117 cr in Amar Ujala Publications

DE Shaw, one of the worlds largest Hedge Funds, is taking an 18% stake in North India based media house Amar Ujala Publications and its printing company for Rs 117 crore, reports Economic Times.

According to the report, DE Shaw would pick 18% stake in Amar Ujala Publications through a preferential allotment for a cash consideration of Rs 58.5 crore along with an 18% stake in A&M Publications, the printing unit of the media house for a similar consideration of Rs 58.5 crore, thus valuing the entities at about Rs 650 crore cumulatively.

Amar Ujala Publications is presently a closely-held company engaged in the business of publishing and printing the Hindi newspaper Amar Ujala which is circulated in north Indian states. A&M Publications, which prints newspapers exclusively for Amar Ujala Publications, is promoted by the Amar Ujala Group.

D.E. Shaw, a multi-strategy hedge fund having assets under management of $25 billion, had recently started Indian operations and last month invested $8 million Amtek India through a preferential allotment of shares

Read article from The Economic Times

MIC Electronics plans an IPO

MIC Electronics, an Hyderabad based manufacturer of LED display systems, is planning to raise close to Rs 100 crores through an IPO in first quarter of January, reported Business Standard. MIC Electronics is into media (LED display), Infotech (software) and telecommunications business

The amount raised is expected to be utilized for infrastructure development, rentals fo screens, development of 3D LED display screens and ramping up research & development amongst other things. Plans are also on to acquire Infostep, a US based company and also venture into entertainment theme park development.

Edelweiss Capital were appointed advisors to the issue which will constitute 25.34% of the company’s fully diluted post issue paid up equity capital.

Read article from Business Standard

Baring picks up stake in steel company

Bhushan Power and Steel, a Delhi-based unlisted company has raised financing from Baring Private Equity Asia. The private equity player has invested Rs 150 crore (around $33 mn) for little less than 10% stake in the company. Sanjay Singal, CMD, Bhushan Power and Steel, has said that funds received from Baring will be invested in an integrated steel complex, being set up in Orissa. Post commissioning, the company will become a 1.2 million tonne integrated steel company. The company may go for an IPO by 2007 – end around the time when the work for the Orissa plant gets over. This is the first investment by Baring from its recently raised $500 million Asia-dedicated fund.

Read article from The Economic Times.

Private equity investments touch $5.5 bn in India

India is turning out to be a real big opportunity for private equity players. The country has seen investments worth $5.4 bn in the first nine months itself for 2006, as against $2.2 bn in the whole of 2005, an increase of a whopping 145 percent, says a recent study conducted by PriceWaterhouse Coopers.

As many as 246 deals were cracked this year versus 169 deals in 2005.

Some of the major investments of the year were Kolhberg Kravis Roberts’ $900 mn in Flextronics Software, Temasek’s $360 mn in Tata Teleservices, Farallon Capital's $143 mn in Indiabulls Financial, among others.

Growing consumer spending leading to the emergence of a high-demand, fast-growing market, and an increasing recognition of India as a high-quality, low-cost production and R&D destination are reasons cited for attracting private equity capital to the country.

However, as against conventional seed / growth funding provided by venture capitalists in the US and the Europe, the Indian market saw more investments in the late-stage funding opportunities, particularly in the pre-IPO and PIPE (private investments in public enterprises) spaces.

Also, unlike the technology boom of the late 1990s and early 2000, investments are now being made across a variety of sectors such as auto components, real estate, infrastructure, pharma etc, indicating a shift in focus from IT / ITeS sectors.

The report also mentions a slate of PE firms, both domestic and international, that have made huge commitments to the India growth story.

Read the article from The Economic Times.

Read the article from The Telegraph, Calcutta.

Nikko, Ambit form AMC JV

Japan-headquartered Nikko and the Ambit group have agreed to form an asset management joint venture in India. Nikko Asset Management has assets of about $90.7 bn under management. It has been an active participant in the offshore Indian asset management market for over a decade now and was one of the earlier foreign institutional investors in India via the group's regional base in Singapore. Since 2004, Nikko Asset Management has invested in additional offshore infrastructure, most notably by establishing a regulated group company in Mauritius and a dedicated India fund management team in Singapore that has enabled the group to expand its Indian investment management capacity rapidly, in particular by facilitating the successful launch of the Nikko BRICs Equity Fund in March 2006.

Ambit is one of the leading financial services group in India. Its primary interests lie in investment banking, private equity, stock broking and consulting. It was established in Mumbai as a boutique investment bank in 1997 by Managing Director Ashok Wadhwa, a former Managing Partner of Arthur Andersen in India.

With respect to the deal, Nikko intends to acquire a 74.9% of the JV while Ambit will hold the remaining portion. The two firms have already agreed to many of the key terms of their cooperation and anticipate entering into a definitive agreement in early 2007. The JV plans to commence the formal licensing process with the Indian financial regulators and plans to beef up infrastructure in anticipation of the formal launch of investment activities.

Ambit has just recently announced a JV with TV18 and the Centurion Bank of Punjab for providing an online broking platform to retail clients.

Credit Suisse, UBS, Aviva, Korea`s Mirae Asset, AXA (with the Bharti group) and Pioneer, are some of the other big-ticket names that are planning to enter the booming Indian mutual fund business.

Read the article from domain-b.com.

Read the article from myiris.com.

The Hutch stake: Game on

Hutchison’s 52% stake in Hutchison Essar Ltd. seems to be gathering a high level of interest amongst the telecom players and equally with PE funds. The Ruias are believed to be looking at buying their partners stake, for which they plan to approach a few banks, as reported by Business Standard.

The race is already on with a number of players lining up for the stake including Reliance Communications in tie up with a few PE funds, Egyptian telecom giant Orascom and Malaysia's Maxis

The Anil Ambani groups Reliance Commnications has reportedly tied up with four American private equity funds -- Blackstone, Texas Pacific Group, KKR and Carlyle, who collectively have equity investments of $100 billion. Reliance Communications would endeavor to be the majority domestic partner if the bid comes through reported the Economic Times.

Orascom, which has over 19 per cent stake in Hong Kong-based HTIL is understood to have appointed Deutsche Bank as their adviser while Standard Chartered is supposedly advising Malaysia’s Maxis.

Goldman Sachs is the advisor to Hutchison and will evaluate all the bids

Go to article from The Economic Times

Go to article from Business Standard