Private equity firm Apax Partners is in advanced negotiations to acquire a significant minority stake in data analytics firm Fractal Analytics in a transaction where existing investors are likely to exit, two people familiar with the development told VCCircle.
The deal is likely to be signed next week, one of the people cited above said, asking not to be named.
India- and US-based Fractal counts private equity firm TA Associates and Malaysia’s Khazanah Nasional Berhad as its investors. TA Associates had made a partial exit from the data analytics firm in 2016 when it sold a 7% stake to the Malaysian sovereign wealth fund. TA Associates may now exit its five-year-old investment completely, the people cited above said.
Apax Partners plans to invest $175 million to $200 million in Fractal Analytics for around a 45% stake, The Economic Times reported earlier on Friday. Apax will also make a primary infusion into the company, the report said.
Apax Partners and TA Associates declined to comment. Fractal and Khazanah did not immediately respond to requests for comment.
Fractal got its first external funding in October 2008 from early-stage investor Kae Capital along with its founder, Sasha Mirchandani, and other investors. In June 2013, TA Associates invested Rs 129 crore ($22.07 million then) for a 25% stake through a mix of fresh issue and secondary share purchase. The transaction valued Fractal at Rs 520 crore.
In 2014, Canadian loyalty management firm Aimia Inc. picked up a 3% stake in Fractal.
In April 2016, Khazanah invested $100 million (Rs 667 crore then) in the company for a 36% stake through a combination of a fresh issue and secondary transfer of shares. TA Associates sold a 7% stake in the company to Khazanah at the time. TA Associates earned an estimated three-fold return for its partial exit. The valuation for Fractal increased to $275 million, a three-fold increase from the previous round of funding and eight times its net sales for 2015-16.
Fractal Analytics has grown over the past few years on the back of acquisitions and an aggressive organic growth strategy.
One of its key competitors is MuSigma Business Solutions Pvt. Ltd, the local subsidiary of US-based MuSigma Inc.
Founded in 2000, Fractal provides business analytics services through big data. It offers marketing analytics, forecasting, pricing and promotions optimization services and consumer insights. It caters to retail, insurance, technology, financial services and consumer goods sectors.