Private equity firm ICICI Venture has divested its entire stake in Chennai-based integrated facility management services firm Updater Services Private Limited to a special purpose vehicle (SPV) owned by the promoters of the company.
The financial terms of the transaction remain undisclosed.
With the stake sale, ICICI Venture has completely exited the company. It had bought out New Vernon’s 40 per cent equity stake in Updater Services in 2008 in a deal valued at about Rs 100 crore ($26 million then).
New Vernon had exited with over 2x from its three-year-old investment, back then.
ICICI Venture had tried to exit its investment in Updater Services previously in 2011 but failed to do so.
Founded in 1985, Updater Services provides integrated facility management (soft services as well as hard services), production support services & staffing solutions, business support services, catering and beverage services and third party vendor management.
The company has an employee base of more than 40,000 with a clientele list that includes more than 750 names. It has clients like corporates, IT parks, industrial and retail companies, and even manufacturing firms like Hyundai and glass producer Saint Gobain.
The company has grown over four times since ICICI Venture bought the stake in Updater. It is believed to have a Rs 400-500 crore revenue firm now.
Veda Corporate Advisors was the financial advisor to ICICI Venture in this transaction. Veda had also advised ICICI Venture when it bought out New Vernon’s stake in Updater Services in 2008.
Also, as part of this engagement, Veda also advised the promoters owned SPV in structuring a long-term and flexible debt option to enable a quick and successful closure of the transaction.
The Bangalore-based investment bank said it ran a competitive bid process in which multiple offers were received.
For ICICI Venture, which is on track to raise its fourth sector agnostic PE fund with a targeted corpus of $500 million, this comes as the first significant exit move in over a year. It did exit Devyani International last year but in a parallel deal had bought stake in Devyani’s parent RJ Corp. It also part exited from a few of its public listed portfolio.
There have been a string of deals in the facility management and related space over the last one year.
Fairfax-controlled Ikya Group, which is a subsidiary of tour operator Thomas Cook (India) Ltd, acquired Chennai-based industrial facility management services firm Hofincons from Australia’s Transfield; Mumbai-based SILA acquired 51 per cent stake in Envocare Pest Control; India Value Fund Advisors (IVFA) and former Godrej Consumer Goods’ executive Arumugham Mahendran jointly acquired ISS Hicare, the second-largest pesticide services company in the country; ValuePro International Pvt Ltd acquired city-based indoor plants firm Gardenia Ornamental.
(Edited by Joby Puthuparampil Johnson)