Kicking off a big-ticket transaction in India in the New Year, global private equity major General Atlantic is investing up to $125 million to buy a minority stake in Fourcee Infrastructure Equipments Pvt Ltd, a Mumbai-based freight and logistics company, at least two sources briefed with the matter told VCCircle.
The investment will be through a mix of fresh capital infusion into the company and a secondary transaction to buy out some stake of the existing investors, the sources add. This will be the third round of funding for the company.
An e-mail query sent to the spokesperson of Mayfield Fund, India Equity Partners and General Atlantic for a comment did not elicit any response till the time of writing this article.
Mayfield Fund, a Mumbai-based mid-market private equity firm, was the first institutional investor in the company and invested around $5 million in 2010. It was followed by India Equity Partners investing up to $25 million, with the original institutional investor Mayfield also participating in a funding round last year.
According to sources, the deal has been done at significant mark-ups. The sources put it to 3-10 times to the last round, which is, indeed, good news in the current market conditions.
Avendus Capital Advisors acted as advisors to the transaction.
Fourcee transports non-petroleum oil and lubricants (non-POL) like fatty acid, crude palm oil, molasses and chemicals via special tank containers on rail as against the earlier practice of moving those via road. It claims to be the only company in India that is into the movement of non-POL products on rail.
The company’s key clients include Continental Carbon India Ltd, Hindustan Unilever Ltd, Adani Wilmar Ltd and Philips Carbon Black Ltd.
According to VCCEdge, the financial research platform of VCCircle, the company had total income of Rs 84 crore and a healthy EBITDA margin of 15.2 per cent for FY10. Its 2011 numbers are not available as of now.
The rail and freight space has attracted private equity investments in the recent past. Some of those include AA Development Capital Investment Managers’ investment of $10 million in Siesta Logistics Corporation Ltd; and Reliance Venture Asset Management Ltd, Kleiner Perkins Caufield & Byers (KPCB) and Sherpalo Ventures’ $8.8 million in Reverse Logistics.
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