Private equity firm TPG Capital has acquired a significant minority stake in RR Kabel Ltd, which makes wires and low-voltage cables, and one of its group companies.
TPG didn't disclose the size of the stake and the financial details of the deal in a statement on Thursday.
VCCircle was the first to report that the transaction was in the offing, adding that the PE firm was poised to acquire 21% stake each in RR Kabel Ltd and Ram Ratna Electricals Ltd, both part of the diversified Ram Ratna Group.
The transaction value for the twin deals is around Rs 630 crore ($88 million), people familiar with the matter said.
RR Kabel managing director Shreegopal Kabra said in a statement that TPG would help the company expand its product offerings and and increase its market presence.
“Within the building materials segment, we have witnessed a growing consumer preference for established and organised brands like RR Kabel,” said Puneet Bhatia, co-managing partner at TPG Capital Asia. “This, combined with India’s strong housing market, positions the company well for significant growth.”
Bhatia and TPG colleague Mitesh Daga will now join RR Kabel’s board of directors.
Headquartered in Mumbai, RR Kabel is a wires and cables manufacturer and has an allied consumer appliances business that includes fans, lighting equipment, switches, water heaters, and air coolers.
TPG’s statement did not name the adjacent business, but as mentioned earlier, the Ram Ratna Group also owns Ram Ratna Electricals, which makes consumer electrical products and sells items such as fans and air coolers among other small household appliances. It is believed to be a Rs 100-130 crore company.
RR Kabel reported a revenue of Rs 1,615 crore and net profit of Rs 86 crore for the year ended March 2017. Apart from operations in India, the firm has a joint venture in Bangladesh in which it holds a 35% stake. It also houses a PVC insulated cables business.
Steer Advisors acted as the financial advisor to RR Kabel while Khaitan & Co served as the legal advisor. AZB & Partners and Cyril Amarchand Mangaldas acted as the legal advisors to TPG for the transaction.
Founded in 1992, US-headquartered TPG has assets under management of around $84 billion globally across sectors including healthcare, financial services, manufacturing, retail and business process outsourcing.
The firm is also reportedly considering investments in SBI General Insurance and beleaguered Jet Airways.
TPG was also in the race along with its portfolio firm Manipal Hospitals in the bidding war to take over Fortis Healthcare Ltd, the second-largest hospital chain operator in the country. It was eventually pipped by Malaysia’s IHH Healthcare.
Earlier this year, TPG also inked an agreement to exit its investment in Vishal Retail.