Private equity giant Carlyle, through its investment arm First Carlyle Ventures III, is investing Rs 103 crore ($23 million) into Mumbai-based speciality chemicals company Visen Industries, two persons with direct knowledge of the transaction told VCCircle.
First Carlyle Ventures III is a part of Carlyle Asia Growth Partners IV, L.P., an affiliate of the buyout major – Carlyle Group. The investment has been made by way of fully convertible preference shares in lieu of a minority stake in the mid-size company that was started by first generation entrepreneur Vijay Nair two decades ago.
“The deal was signed last week,” said a source close to the development. The company has been growing at a CAGR of about 30 per cent. According to VCCedge, the financial research platform of VCCircle, the company recorded revenues of Rs 417 crore with PAT of Rs 27.1 crore for the year ended March, 2010.
A spokesperson for Carlyle declined to comment and an email sent to Visen Industries did not elicit any response at the time of posting this article.
Visen is a fast-growing emulsion manufacturing company in India with a production base of 1,20,000 MT, spread across three manufacturing units (Tarapur, Silvassa and Jammu), according to the company website. The polymer emulsion manufacturer caters to five practice areas – paints & coatings, adhesives, textiles, construction chemicals and consumer products.
Visen is raising the fund to set up a plant in the UAE, said one source. The production capacity of the company will go up to 2,20,000 MT per year when the UAE plant goes on stream.
Increasing urbanisation, cheaper housing loans and a shift from semi-permanent to permanent housing structures have been driving the growth in decorative paints segment, which constitutes 70 per cent of the $2 billion paint industry in India. An average growth of about 10 per cent in the automobile sector, which provides half of the revenues in the industrial paints segment, is also an attraction for the industry. Industrial paints account for 30 per cent of the paint industry revenues in India.
The paint and speciality chemical business has also seen some private equity action in the past. In 2009, Nalanda India Fund invested $7.8 million in Berger Paints India Ltd, a Delhi-based public-listed paint manufacturer.
Since its closing at $1.04 billion in June, 2009, Carlyle Asia Growth Capital Partners IV (CAGP IV) has already invested in eight companies. CAGP IV is the fourth fund managed by the Carlyle Asia Growth Capital group, a sector-agnostic growth capital fund which invests in high-growth companies with strong local management and leading market positions across China, India, Korea and other key Asian markets.
In 2006, Carlye, through First Carlyle Ventures III, had invested $20 million (Rs 90 crore) in Claris Lifesciences, through preferential shares. It has also been upping its stake in Allsec Technologies, a business process outsourcing company.
The Carlyle Group has closed four growth capital investments, totalling over $140 million in Asia. These include an undisclosed sum in Andhra Pradesh-based dairy firm Tirumala Milk Products Pvt Ltd, two Korean firms (EO Technics Co and HKucar Global) and one Chinese company (ATMU Inc.).