Engineering firm Praj Industries that makes ethanol equipments, has acquired a majority stake in Neela Systems Limited (Neela) for approximately Rs 64 crore($ 12 million), valuing the privately held water treatment firm at Rs 127.5 crore. Mumbai based MX Capital was the exclusive financial advisor for the seller.
The public listed firm that is backed by a number of marquee investors including ace stock market investor Rakesh Jhunjhunwala, Tata Capital and Norwegian sovereign wealth fund, will buy 50.20 per cent of Neela.
Mumbai-based Neela, has business interest in water treatment and modular process systems and is focused on biotech, pharma and personal care industries. While Neela becomes a subsidiary of Praj Industries, it would continue to operate as an independent entity, the company disclosed on Friday.
Neela was founded in 1989 by Himanshu Shah is a strong player in the high purity water segment and has a manufacturing facility at Wada, Thane to build USDA, UKMCA and WHO compliant systems. Shah will continue as the managing director of Neela.
Neela has a turnover of approximately Rs 90 crore including exports and the latest deal values it at Rs 127.5 crore. In comparison, public listed VA Tech Wabag that had consolidated revenues of Rs 1,242 crore during FY11 has a market cap of Rs 893 crore.
Water Spells Money For Investors:
Water purification and waste water treatment services has been one of the more happening areas of infrastructure services with investors striking back to back deals in the business.
Last month Matrix Partners India invested Rs 22 crore in Waterlife India Pvt Ltd, a Hyderabad-based water purification company. Founded in 2008, Waterlife is involved in installing and operating mini water purification plants in rural areas, treating water for bacterial and chemical contamination.
In September, Aditya Birla Capital Advisors, the private equity arm of the Aditya Birla Financial Services Group, made its debut deal from its second fund by investing Rs 40 crore in SMS Paryavaran, a water and wastewater treatment company.
In another deal, Olympus Capital Holdings Asia acquired a significant minority stake in Vishwa Infrastructures and Services Pvt Ltd from Axis Infrastructure Fund 1 for Rs 240 crore. Hyderabad-based Vishwa Infrastructures is an infrastructure development company with expertise in developing and executing integrated water supply and wastewater projects. New Enterprise Associates (NEA), which invested Rs 100 crore in Vishwa through a fresh infusion in February last year, also picked up stake in this transaction where Axis has sold its 35.6 per cent stake.
Earlier last year, IFC said it is lending $5 million to Hyderabad-based water services company Vishwa Infrastructures and Services Pvt Ltd for its public-private partnership (PPP) project in the water and waste-water space.
In another deal, Nexus Venture Partners invested Rs 9 crore into Greywater Technologies Pvt Ltd, a company providing packaged products for water and waste water treatment. Greywater operates in India through its wholly owned subsidiary Jaldhara Technologies.