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Rewind 2014: Top PE deals in consumer sector

31 December, 2014

The consumer sector saw a marked rise in private equity investment activity with investors betting on the domestic consumption theme. While the previous year saw the top deals stuck at a modest $40-50 million bracket, this year there were two $100 million plus deals with three more in the $70-80 million range.

PE firm Warburg Pincus returned to clock the biggest deal in the space this year after having sealed the largest investment in the sector in 2013 (when it bought a stake in Biba Apparels) by betting on Kalyan Jewellers. Another investor who figures in the second consecutive year among the top deals in the sector is Cartica Capital. It bought a stake in Page Industries after backing TTK Prestige last year.

Besides the top five, some other notable transactions include Temasek buying 8 per cent stake in Shishir Bajaj Group’s FMCG firm Bajaj Corp from the promoters and Goldman Sachs (Principal Investments) teaming with Mitsui to invest in Chennai based Global Beverages and Foods Pvt. Ltd along with its promoter A Mahendran.

Here’s a quick look at the top deals in the consumer products and services space:

Warburg Pincus backs Kalyan Jewellers

Kerala-based Kalyan Jewellers India Pvt Ltd raised Rs 1,200 crore ($195.6 million) from private equity firm Warburg Pincus. For Warburg Pincus, this is the first such investment in jewellery manufacturing sector even though it has previously backed Vaibhav Gems. This also happens to be the second biggest bet ever in an Indian company for Warburg, behind its $290 million investment in Bharti Televentures which fetched it record returns more than a decade ago. Kalyan Jewellers also marked its third addition to its India portfolio this year after buying a stake in Laurus Labs and CarTrade.com besides putting in more money in some existing investees such as AU Financiers and Quikr.

PremjiInvest invests in Manipal Global Education Services

This deal was never formally announced but Bengaluru-based Manipal Global Education Services Pvt. Ltd, an educational and training services provider, is believed to have received investment worth $147.39 million (Rs 900 crore) from PI Opportunities Fund I, a fund managed by PremjiInvest for an undisclosed stake. The education services firm has in the past also raised funding from IDFC Alternatives, Capital International and Catamaran Ventures, the private investment arm of Infosys co-founder N R Narayana Murthy. The latest deal has brought on board private investment from another IT industry chief Azim Premji, the promoter of Wipro.

Temasek invests in Devyani International as ICICI Venture part exits

Temasek invested approximately Rs 500 crore ($81.3 million) to buy a stake in Devyani International, the largest franchisee for Pizza Hut and KFC in India. Devyani is a subsidiary of RJ Corp, which is the holding company of the group’s various businesses. The deal was part of a twin transaction in which existing investor ICICI Venture part exited from Devyani while the state investment firm of Singapore Temasek put in additional money into the firm. In a parallel transaction, ICICI Venture picked a stake in industrialist Ravi Jaipuria’s group holding company RJ Corp Ltd. ICICI Venture is believed to have invested Rs 180 crore ($30 million) in RJ Corp.

Fairbridge puts in more in Thomas Cook

Fairbridge Capital, an affiliate of Canada’s investment firm Fairfax Financial, invested an additional Rs 500 crore ($82 million) in tour operator Thomas Cook (India) Ltd through a preferential allotment. Fairfax, which has a controlling stake in Thomas Cook and has acquired HR services provider Ikya through the listed firm, has been using Thomas Cook as a business cum acquisition platform for India, though it is in the process of raising a separate India investment vehicle. The fresh investment in Thomas Cook was through a convertible route as it already holds the maximum stake allowed as per public listing norms. However, with the proposed acquisition and merger of Sterling Holiday Resorts (India) Ltd it may be able to convert the securities without breaching the 75 per cent holding limit.

Cartica Capital bets on Page Industries

Emerging markets-focused investment firm Cartica Capital picked up a 7.6 per cent stake in Page Industries, a licensed manufacturer of the Jockey brand of innerwear for men and women in India, Sri Lanka, Bangladesh and Nepal. The stake was picked in two tranches worth around Rs 485 crore ($78.7 million). Part of this was acquired from institutional investors besides the promoters of the Nalanda Capital-backed company, the Genomals. This made it the second largest institutional shareholder after Nalanda Capital, which is sitting on a multi-bagger on its investment in Page Industries.


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Rewind 2014: Top PE deals in consumer sector

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