Friday, March 23, 2007

ASK calls off JV with Raymond James

The ASK-Raymond James JV is no more. Brothers Asit and Sameer Koticha-owned ASK Investment & Financial Consultants has bought out the 50% strategic stake from Raymond James Financial, Inc. for an undisclosed amount. Raymond James will not have any presence in India post-deal. The Kotichas have kept their options open on having financial partner or strategic investor in the future.

Subsequent to the buyback, the 50% shares will remain with the two brothers-Asit and Sameer. In the new holding pattern, the two brothers will hold 75% shares and another 25% will stay with Bharat Shah, who will be heading the ASK Investment Managers Private Limited. The ASK Group also plans to enter mutual fund, real estate and NBFC businesses.

Read the Business Standard article.

Warburg Pincus appoints former McKinsey executive as MD at Mumbai office

The Economic Times reports that Leo Puri, a former executive at global consulting firm McKinsey & Company, has been appointed managing director by Warburg Pincus for its India office. Mr. Puri is a post-graduate in politics, philosophy and economics from Oxford University, and was a co-leader of the financial services practice in Asia for McKinsey. He will begin at Warburg's New York office in April, and will move to its Mumbai office later. Mr. Puri’s appointment seems to fill in the gap created by ex-MD Pulak Prasad’s exit from Warburg Pincus some time back.

Torrent in association with Fortress Investment Group and Greater Pacific Capital for Merck bid

The partners of Torrent Pharmaceuticals, in its bid to acquire Merck’s generics business unit, have come to light. New York-based private equity and hedge fund manager Fortress Investment Group and London-based private equity player Greater Pacific Capital, in association with Torrent Pharma, are close to bagging the over $2 bn-worth global generics business of Merck. This consortium and Israeli pharma company Teva may be the only two left in the fray with the other two global pharma majors Mylan and Actavis having dropped out of the race.

Fortress Investment Group has $30 bn in assets under management. This New York-headquartered group is largely into the businesses of private equity and hedge funds management. The private equity business of Fortress Investment Group manages approximately $17.5 bn of assets under management.

The other private equity firm, Greater Pacific Capital based at London, is a much smaller player with under $1 bn assets under management currently. Greater Pacific’s CEO and founder partner is Ketan Patel who was previously a managing director in the investment banking division at Goldman Sachs, where he founded the Goldman Sachs Strategic Group, a think tank at Goldman Sachs. Greater Pacific Capital invests primarily in equity or equity-related securities in public and private companies in India and China.

If this deal were to come through, it would be one of the biggest by an Indian company in the pharmaceutical sector. Torrent Pharma will have a minority stake while a big chunk of the funding will be done by Fortress Capital. If this consortium wins the bid then Torrent Pharma will manage the entire generics business, while the private equity players will be financial investors.

Read The Economic Times article.

HCL Technologies may bid for Cambridge Solutions

One of India’s premier IT companies, the $1.1 bn-HCL Technologies may bid for Cambridge Solutions, one of the top BPO outfits of the country, valued at around $350 mn. If the deal sails through, it may be the biggest M&A ever in the Indian IT space.

HCL has signaled early interest to acquire around 42% promoter holding put up for sale. The promoters of Cambridge have mandated Lehman Brothers to scout for potential suitors. The promoters of Cambridge, which includes names like ex-McKinsey chief Rajat Gupta, the US-Canadian Bronfman family of Seagram fame, serial investor Ramesh Vangal and former PepsiCo chairman Chris Sinclair, together hold 59.15% stake. It is learnt that Mr. Vangal, who is the single largest individual investor with around 18% stake, is unlikely to offer his shares.

Almost two-thirds of Cambridge’s revenues comes from high-end BPO operations spread across the US, India and Europe. It has a strong presence in the lucrative insurance processing domain, with around 2000 of its total 4500 employees located in the US. HCL has BPO operations at nine centres in India, two in the UK and one in Malaysia, which provide both voice and non-voice services. The BPO operations constitute around 17% of revenues and employ around 10,000 people.

Read the article in The Economic Times.
Related Post:
Scandent to sell stake in Cambridge Solutions; Apollo, Fidelity, EDS approached

Dabur to buy 60% stake in Singapore-based FMCG company Unza for Rs. 675 crores

Dabur is about to acquire over 60% stake in Singapore-based consumer goods company Unza Holdings for Rs. 600-675 crores. Dabur is expected to buy out the holdings of private equity funds Actis and Standard Chartered who hold 30% each in the $150 mn-Singapore company. The deal is touted to be one of the largest overseas acquisition deals in the FMCG space, and make it the third-largest FMCG company in India behind HLL and ITC with manufacturing facilities in China, Vietnam, Indonesia and Malaysia.

Unza is a leading personal care manufacturer and marketer in South-east Asia with 48 brands in its portfolio, and is equally owned by the company management and the two private equity funds.

Read more in The Economic Times article.

Kotak PE invests Rs. 100 crores in logistics firm DRS Logistics, $12 mn in Home Solutions Retail

Kotak Mahindra Bank, through its private equity fund, the India Growth Fund, has invested Rs. 100 crores in Hyderabad-based DRS Logistics, better known by its brand name Agarwal Packers and Movers. The funding would be used to set up logistics parks across six cities where land has already been acquired.

The Rs. 200 crore-company has also applied to the director general of civil aviation (DGCA) to kick off an air cargo airline in the country. Besides, it is in talks for leasing two aircrafts to operate services in six sectors, covering the four metros and Bangalore and Hyderabad.

DRS owns warehousing infrastructure in Gurgaon, Hyderabad, Mumbai and Chennai totaling 1.5 mn sq ft in space, and is looking to add an equal amount of space next year expanding to a total of six cities to set up logistics parks. The company plans to invest Rs. 150 crores on this.

Read the DNA Money article.

Kotak’s India Growth Fund is also investing $12 mn in Kishore Biyani’s Home Solutions Retail India Limited, which is set to roll out Home Town, its new format modeled on Home Depot. This is the second round of private equity investment in the company after ICICI Ventures invested $27.3 mn in October 2006.

Home Town will offer everything a customer would need to build, furnish and decorate a home including building material, paints, tiles, electrical and plumbing products and services, furnishings, furniture and consumer durables. According to estimates, the current home market in the country is estimated at between Rs. 75,000 crores and Rs. 100,000 crores which is largely serviced by the unorganized market.

The first Home Town is slated to roll out on March 31 from Noida and thereafter in six other cities within six to nine months in cities, including Hyderabad, Bangalore, Pune, Thane, Surat and Ahmedabad at an investment of Rs. 150-175 crores. Each of the Home Town formats, which will be spread over at least 125,000 sq. ft., will also incorporate e-Zone, the electronics lifestyle format and the Collection-i, furniture and home accessories formats.

Read the DNA Money article.

Intel Capital appoints Sudheer Kuppam as MD for Asia region

Sudheer Kuppam, Director of Flash Memory and Semiconductor Sector at Intel, will join Intel Capital, the venture capital arm of Intel, as the Managing Director for India, Japan, Australasia and South-East Asia. He would be based in Bangalore and would be responsible for leading Intel’s investment strategies and expansion plans including placement of the $250 mn Intel Capital India Technology Fund.

IDG Ventures India to invest $2 mn in IT company Manthan Systems

The Economic Times reports that early-stage technology venture capital fund IDG Ventures India is making its first investment of $2 mn, out of a total fund size of $150 mn, in Manthan Systems. Manthan is a retail industry focused business intelligence and analytics software products company. The money raised from IDG Ventures would be utilized to build the sales team and product development teams. IDG Ventures Vice-Chairman and Managing Director India Sudhir Sethi will join the Board of Directors of Manthan Systems.