Carlyle is close to executing its first major buyout in India by inking a deal to buy bulk of the business of New Silk Route-controlled financial services firm Destimoney. The move has got a green signal from India's competition watchdog Competition Commission of India (CCI).
The terms of the transaction remain under wraps but previous media reports had pegged it around $200 million.
The deal involves Carlyle acquiring Destimoney Enterprises Private Limited (DEPL) from Destimoney Enterprises Limited (Destimoney). This is to be executed through a Mauritius incorporated vehicle christened Quality Investment Holdings, as per the share purchase agreement dated November 27, 2014.
The proposed deal will also result in an indirect acquisition of 49 per cent stake in Punjab National Bank Housing Finance Limited, which at present is held by DEPL. The transaction would, however, entail hiving off six subsidiaries of DEPL, which is expected to be outside the purview of Carlyle. It is not clear which all businesses would be part of Carlyle's buyout and which would be retained under Destimoney.
DEPL, a subsidiary of Asia-focused growth capital firm New Silk Route-controlled Destimoney, is engaged in the business of distribution of financial products including mortgage and home loans of third parties and providing advisory and consultancy services for wealth management, investments, financial services, etc.
It also owns 49 per cent stake in PNB Housing, with PSU-bank PNB holding the balance 51 per cent.
Carlyle already has an exposure to Indian financial services business with minority stakes in three firms namely Edelweiss Financial Services, India Infoline Limited (IIFL) and South Indian Bank. Carlyle had last year exited its investment in Repco Home Finance, which is in the same line of business as PNB Housing Finance.
New Silk Route had bought UK investment group Dawnay Day’s stake in its Indian business way back in 2008. The deal included the stock brokerage and third party distribution business but excluded some other units such as its hospitality arm.
The firm was set up as a joint venture between former DSP Merrill Lynch executive Alok Vajpeyi and Dawnay Day International, the financial services arm of the UK-based Dawnay Day Group. Vajpeyi had also sold his stake as New Silk Route bought into the firm.
(Edited by Joby Puthuparampil Johnson)