Global alternative asset manager Carlyle Group has invested $32.8 million (over Rs 201 crore) to acquire a 54.85 per stake Chennai-based Newgen KnowledgeWorks Private Limited, a provider of publishing and technical services for many prestigious publishers in the US, the UK and Europe.
The amount will be invested from First Carlyle Ventures III, an investment fund advised by the PE firm. Carlyle acquired the stake held by Franklin Templeton Private Equity Strategy, Aureos South Asia Fund and ePlanet Capital in Newgen. This is the second time the PE firm is investing in Newgen following its investment in 2004 and exit in 2011.
“Newgen has built an extremely successful business with strong franchise value. We were pleased with Carlyle’s prior investment in Newgen, and we see the same potential for creating value through our latest investment. We will once again leverage Carlyle’s deep industry expertise and global network to support Newgen through our renewed partnership,” said Shankar Narayanan, managing director, Carlyle India.
“Newgen’s diversification into adjacent businesses is intended to add value and create upside possibilities to its highly consistent and profitable business model,” said Narayanan. These include financial publishing through its UK subsidiary Spectra; digital marketing and discoverability through its subsidiary ePagemaker; and bespoke publishing and documentation solutions through its UK subsidiary GPSL.
The firm offers publishing and technical services for books and journals such as content sourcing, content creation, project management, author liaison, development editing, copy-editing, design, artwork and permissions, typesetting/composition, XML creation, e-book delivery, EPUB conversion, bespoke publishing, backlist conversions, mobile app creation and distribution and discoverability solutions for content through its production centres in India, UK and US.
“Newgen has emerged as a preferred service provider for its clients due to its high service quality, efficiency and focus on automation. We are happy to partner with Carlyle again, which engaged in numerous value-creation activities and acted as a catalyst in the growth of the company during its previous stint with Newgen,” says Prabhakar Ram, founder and CEO of Newgen.
Since 2000, Carlyle had invested over $1.1 billion of equity in around 30 transactions in India as of September 30, 2014.
In September, Carlyle Group LP closed its fourth Asia fund Carlyle Asia Partners IV at $3.9 billion, the second-largest private equity fund ever raised for Asia investments. Its major investments in India include South Indian Bank, Value and Budget Housing Corporation, IIFL Holdings Ltd and Edelweiss Financial Services.
(Edited by Joby Puthuparampil Johnson)