Carlyle invests in DEE Piping; BanyanTree and Capvent exit

Private equity firm Carlyle has acquired a significant minority equity stake in Faridabad-based piping systems manufacturer DEE Development Engineers Ltd that operates under the DEE Piping banner partly by buying out stake held by two previous PE investors BanyanTree and Capvent, as per a press statement.

The company did not disclose the financial details of the transaction but is estimated to be worth Rs 150-200 crore as per VCCircle estimates.

BanyanTree and Capvent had invested around Rs 50 crore in DEE Piping in 2011, according to VCCEdge, the data research platform of VCCircle. It could not be immediately ascertained if the two investors put in fresh money thereafter.

BanyanTree said in a separate disclosure that it has now completely exited the company with 3 times cash multiple and generated a similar return for its co-investor Capvent. It did not share the deal value either.

The exit yielded close to 30 per cent internal rate of return (IRR) for BanyanTree. Along with prior partial returns of capital from Trimax and GEI, BanyanTree has now returned a quarter of the capital it raised in its Fund I which it raised between 2008 and 2010, it said.

Separate emails sent to BanyanTree Growth, Capvent, Carlyle and DEE Piping seeking further details on the transaction value did not elicit any response immediately.

“We expect to leverage Carlyle’s international brand equity, global resources and strong sectoral expertise to further grow and diversify our business domestically as well as globally,” K L Bansal, founder, chairman and managing director of DEE Piping, said.

DEE Piping provides design, detailed engineering and fabrication of pressure piping systems to clients across diversified industries such as power, process and oil & gas. During 2011-2014, it grew its revenue and EBITDA by three times.

Incorporated in 1983, DEE Piping has an installed capacity of 36,000 million tonnes in Palwal district, Haryana, apart from an engineering office in Chennai and sales representation across the world.

“DEE Piping has built an extremely successful business with strong capabilities across multiple dimensions – deep relationships with its marquee customers, state-of-the-art infrastructure, comprehensive product and service offering, a pool of skilled workforce, and a consistent track record of timely delivery of quality products,” said Shankar Narayanan, managing director and co-head of the Carlyle Asia growth capital team.

Carlyle's investment was routed through First Carlyle Ventures III.

Carlyle invests in India through separate units—one making large bets and handled through its buyouts team and the other making growth equity capital investments which are smaller in size. This deal comes from the latter team, its first in India this year.

Last December, it had backed Newgen KnowledgeWorks.

Recently, the PE major said it will invest up to $500 million in Magna Energy Ltd, a South Asia-focused energy company floated by former Cairn Energy Plc executives Mike Watts and Jann Brown. The funding will come from Carlyle International Energy Partners (CIEP), a specialist fund that focuses on hydrocarbon and oil and gas sector in Europe, Africa, Latin America and Asia.

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