Tano Capital has achieved its first exit from its India portfolio by selling out its minority stake in privately held Ravin Cables through a strategic M&A sale to Italy’s Prysmian.
Tano, which invested $3.4 million in June 2006, is estimated to have generated 18% IRR in the three-and-half-year-old investment in dollar terms, VCCircle has learnt.
Milan-based Prysmian acquired 51% controlling stake in Ravin Cables for Rs 200 crore last week valuing the Mumbai-based cable manufacturer at Rs 392 crore. The firm had revenues of Rs 310 crore in 2008-09 and EBITDA of Rs 36 crore which translates into a valuation of 11 times EBITDA.
The remaining 49% of Ravin Cables Ltd will continue to be owned by the current promoters, Karia family. Vijay Karia will be the Chairman and Managing Director of the firm even as Prysmian has picked a majority stake.
Ravin will issue fresh shares worth Rs 100 crore to Prysmian while the remaining stake will be acquired from existing shareholders– Reliance Power Fund and Tano Capital. Tano had picked 10.7% stake in Ravin in 2006 that would have valued the company at around Rs 147 crore. At the same time, Reliance Power Fund had picked 8.3% in the cable company.
Singhi Advisors was the sole advisor to Ravin Cables Ltd while Argus Partners was the Indian legal advisor to Prysmian for the transaction.
Ravin is engaged in low and medium voltage cables and has a business presence outside India in Africa and the Middle East. Besides its principal manufacturing facility in Pune, Ravin Cables is also present in the UAE with the company Power Plus Cable Co LLC, a joint venture with the government of Fujairah. Power Plus is equipped to produce high voltage cable. Ravin has over 355 employees spread between its two facilities in India and the UAE.
The partners plan to more than double the turnover by 2012, particularly by developing the mix of higher value-added products. India’s market for high voltage cables and systems is expected to grow rapidly, doubling in size in the next three years thanks to the country’s dynamic economy and the need for rapid development of its power distribution grids.
Listed on the Milan Stock Exchange in the Blue Chip index, Prysmian is engaged in high-technology cables and systems for energy and telecommunication and had revenues of over € 5 billion in 2008. Prysmian boasts a global presence with subsidiaries in 38 countries, 53 plants in 21 countries, seven R&D centres in Europe, USA and South America, employing around 12,000 employees.