Four-S Private Equity Track

Issue: 2nd 8th April, 2012

Your Eye to Indian Private Equity

217.0
16 14 12 10 8 6 4 2 0 1st April'12
PE Investments

PE activity for the week

During the week ended 8th April, 2012, there were 7 PE/VC deals worth $217mn compared to 12 deals worth $39.7mn in the previous week. Out of the total, there were 3 growth stage deals, 2 early stage deals and 1 deal each at Late and PIPE level. In the largest deal during the week, Advent International invested $105mn in CARE Hospitals.

250.0 200.0 150.0 100.0 50.0 0.0 39.7 12

8th April'12
No. of Deals

Private Equity: Investment Summary during the week

Investor (s) Advent International GIC, Baring PE India Agri Business Fund Accel Partners, Blume Ventures and Mumbai Angels Inventus Capital Partners ASK Property Investment Advisors TA Associates
Source: Four-S PE Database

Target CARE Hospitals Marico Super Agri Seeds Pvt. Ltd HMS Infotech Pvt Ltd Savaari Car Rentals Pvt Ltd Godrej Landmark Redevelopers BillDesk

Stake (%) NA 4.5 NA NA NA 49 NA

Value ($mn) 105.0 100.0 9.8 1.2 1.0 NA NA

Sector Services Manufacturing Manufacturing Services Services Construction Services

Industry Health Services Personal Product Food & Beverage IT/ITeS Other Misc. services Real estate BFSI

Segment Hospitals FMCG Food Products Software Car rental Real Estate Online payment

Stage Late PIPE Growth Early Early Growth Growth

Advent International invests $105mn in CARE Hospitals

Advent International Corp. has invested $105mn in the Hyderabad-based hospital chain CARE Hospitals Pvt. Ltd. the company plans to increase the bed capacity to 2,600 from the current 1,600 and get into new specialties, including oncology. CARE, with 12 hospitals and focus on smaller cities, has a presence in Bhubaneswar, Secunderabad, Nagpur, Surat and Visakhapatnam. The chain, founded in 1997, is estimated to have a revenue of at least Rs. 5bn. Four-S Comment: This deal is one of the largest private equity deals in the healthcare sector in the last five years.

Healthcare is touted to be one of the most active sectors for PE deals this year. The year so far has seen 9 deals worth $406mn including 2 $100mn deals GICs $100mn investment in Vasan Healthcare, which operates eye care hospitals and Olympus Capitals $100mn in DM Healthcare Pvt. Ltd. PE investors feel healthcare is attractive as national brands are yet to be created in smaller cities. Further, exits are not expected to be issues for investors as big brands are very acquisitive. These companies would like to take over an established business than starting all over again in a new segment or geography.

GIC, Baring buy Maricos stake

Indian Private Equity Weekly Update 2nd 8th April, 2012

Singapores sovereign wealth fund GIC and Baring Private Equity Partners India are investing ~$100mn in public listed consumer products company Marico Ltd. GIC is investing $75mn for 3.4% stake and Baring India PE is putting in another $25mn) for 1.1% in the firm. Four-S Comment: The deal comes two months after the firm announced it would buy personal care brands such as Set Wet, Zatak and Livon among others, from Reckitt Benckiser. This investment will help Marico fund its acquisitions. These brands in Reckitts personal care products portfolio are among the top three positions in the hair gel, male deodorant and leave-on hair serum categories. This acquisition gives Marico a strong presence in the rapidly growing deodorant and male grooming categories in India. And it will further reduce Maricos dependence on edibles oils and hair oils.

HMS Infotech Pvt Ltd, a technology startup offering Cloudbased SaaS (Software as a Service) solutions for small and mid-sized hospitality industry, has raised $1.2mn in a funding round led by venture capital firm Accel Partners. Blume Ventures and Mumbai Angels also took part in the round. The company will use the funds to gain further foothold in the global market. It already has customers in 40-plus countries and will now focus on making inroads in the North and South American markets. Four-S Comment: Accel Partners has been making a lot of bets on SaaS and Cloud-related companies in India. Only last week, it invested $2.8mn in Enterprise Nube Services Pvt Ltd, which provides Cloud solutions for companies in marketing, sales and customer service domains. In another such deal, the VC firm put in $1mn in SaaS-based social customer support startup Freshdesk.

India Agri Business Fund invests in Super Agri Seeds

India Agri Business Fund has invested Rs 500mn in Hyderabad-based Super Agri Seeds Pvt Ltd. Super Agri markets about 140 hybrids and varietal seeds under the Super Seeds brand, mainly in the Andhra Pradesh and Uttar Pradesh markets. The company, with strengths in cotton, corn, rice and vegetable, has lined up 60-62 new hybrid products in the next two years. The company will use the funds to finance its expansion and set up Research and development centres in Hyderabad and in Bangalore. Four-S Comment: India Agri Business Fund is a $120mn fund instituted in 2008 for which Rabo Equity Advisors is an investment advisor. About 65% of the fund has already been invested across 8 agri-business entities wherein this is a first investment in a seed company. The fund has invested in Geepee Agri Pvt Ltd, Sri Biotech Laboratories, LT Foods and Daawat, among others. Rabo Equity is gearing up to raise money for its India Agri Business Fund II. The fund is estimated to be of about $250mn.

Savaari Car Rentals raises $1mn from Inventus Capital Partners

Savaari Car Rentals Pvt Ltd, a company offering chauffeurdriven car rental services online, has raised series A funding of $1mn from Inventus Capital Partners. Bangaloreheadquartered Savaari operates across the country (excluding the North East region). The capital raised will be used to scale up its marketing team and grow its business across cities by establishing a robust sales network. Additionally, Savaari will invest in technology solutions for enhancing customer experience. Savaari has grown to a network of over 100 operators across 60 cities in India. It targets corporate and retail users, as well as online travel agents whose clients mostly opt for day trips, multi-day tours and also multi-city trips.

ASK Properties to acquire 49% in Godrej Properties' redevelopment project

ASK Property Investment Advisors is acquiring a 49% stake in Godrej Landmark Redevelopers, a subsidiary of Godrej Properties. Godrej Landmark Redevelopers has entered into a tripartite agreement with Kamla Landmarc Property Leasing and Finance Pvt Ltd and 18 societies to undertake a residential redevelopment project in Sahakar Nagar,

Hospitality SaaS Solutions Firm gets $1.2mn from Accel Partners, Others

Indian Private Equity Weekly Update 2nd 8th April, 2012

Chembur, Mumbai. The project, spread over approximately 14,600 mtrs will offer 600,000 sq.ft of saleable area and is proposed to developed as a modern group housing residential project comprising of 2,2.5 and 3 BHK apartments.

investment in IT services firm MindTree Ltd for Rs 900mn ($18mn). The venture capital firm invested Rs 236.8mn in MindTree at Rs 41 per share when MindTree raised its first round of funding in 2000. In the latest round of exit, it sold the shares at Rs 496.23 a unit, translating into 12x return on its original investment.

TA Associates acquires minority stake in BillDesk

PE investor TA Associates has acquired a minority stake in epayment processing services provider BillDesk (part of IndiaIdeas.com Ltd) for an undisclosed amount. BillDesk offers online payment services for utility bills, credit card, depository account charges and ISP charges. Financial investors in BillDesk include Clearstone Venture Partners and SBI besides early investors in the company Bank of Baroda and National Venture Fund for Software & IT Industry. As of August 2011, the company had 45 banks and financial institutions as its clients, as well as 250-300 large billers (all major telecom operators), around 20 electricity companies, 30 insurance firms, key travel companies and large, pure play e-commerce platforms.

Pragati India Fund reaches first close at $70mn

Pragati India Fund, a sector-agnostic private equity fund which is targeting to invest in economically underdeveloped and low-income states of India, has reached the first close of $70mn for its maiden fund with a target of $100mn. The fund has received commitments of $20mn from International Finance Corporation (IFC) and $50mn from Commonwealth Development Corporation. A sectoragnostic fund, Pragati will primarily invest in areas like healthcare, ancillary infrastructure services, ancillary oil and gas services, manufacturing and education in low-income states such as Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh, Chhattisgarh and Orissa.

Fund Raising & Liquidity Events

IFC may invest in BanyanTree Capitals second fund

IFC, the private sector investment arm of World Bank, may invest up to $25mn in the second fund being raised by BanyanTree Capital Advisors Ltd. BanyanTree Growth Capital II targets $150-175mn to make structured investments in small and medium enterprises (SMEs) in India. BanyanTrees maiden fund was anchored by FMO and DEG, the development financial institutions of the Netherlands and Germany, respectively. BanyanTree focuses on neglected sectors/themes like manufacturing and niche industrial segments that get amply reflected in its portfolio. Its investments are usually hybrid capital or mezzanine, which typically ensures a 3x return while offering limited dilution to promoters. This asset class is witnessing rising interest from investors.

Warburg Pincus sells 3.7% in Max India

Warburg Pincus has part-exited from its eight-year-old investment in the diversified company Max India, which houses insurance and healthcare businesses of Analjit Singh. The PE firm sold 3.7% stake for $33.5mn (Rs 1.7bn). Warburg Pincus held a little less than 6% stake in Max India as of December 1, 2011, and its remaining stake is valued at around Rs 1bn. The stake was sold by Warburg through its entity Parkville Holdings Ltd, at a price of Rs 180 per share, which gave the PE firm a return of 4.5x.

Anish Modi, Sumit Chandwani float $300mn Fund

Former ICICI executive director Sumit Chandwani and erstwhile India head of Hong Kongbased sweat fund ADM Capital Anish Modi will start operations of the $300mn fund called Arth Capital from an office in Nariman Point this

Walden sells 4.5% in MindTree

Venture capital firm Walden International has sold almost half of its remaining 9.8% stake in its nearly decade-old

Indian Private Equity Weekly Update 2nd 8th April, 2012

month. The new private equity venture will mainly invest in companies belonging to sectors such as manufacturing, engineering, life sciences and healthcare and consumer services.

Private Equity and M&A News New Silk Route sets aside $100mn for platform deals in F&B space
New Silk Route has set aside $100mn (Rs 5bn) to invest in a portfolio of four food and beverage firms by crafting a model that has never before been implemented in India. The investments will be channeled through a holding firm that will take a controlling stake of 51% in mid-sized promoter-led firms in an initiative that has been informally termed 'Project Gastronomy'. Promoters will be asked to cede control of accounting, human resource management and project management in return for fresh capital and handholding to expand their firms both in India and overseas.

Financial investors, including Anil Ambani's Reliance Capital, are pushing for an exit from homegrown kidswear retailer Gini & Jony, possibly leading to a strategic sale of the company which went through a corporate debt restructuring (CDR) last year. Strategic buyers such as Arvind and Madura Fashion & Lifestyle were approached with a proposal to offload 70% stake for Rs 3.5bn, as per news reports. But these talks fell through due to a valuation mismatch, even as PE investors don't seem bullish about the sector following the recent collapse of Lilliput Kidswear and Avigo Capital Partners's troubled buyout of Spykar Jeans.

IPO, Other Offerings Ace Tours to raise funds for expansion

Surat based Ace Tour Worldwide Limited is planning to raise IPO through issue of 8.1mn shares by diluting 52.88% stake in the company. The funds raised will be used to set up service apartment facility at Surat; to upgrade the hardware and software facilities for web portal; for brand building exercise and for working capital requirement. Promoted by Raju Choksi, Bharat Choksi, Jayesh Choksi and Mayank Choksi, Ace Tours provides travel services. The company has branch offices in Mumbai, Ahmedabad and Rajkot.

Tata Capital enters fray for Thomas Cook

Tata Capital, the financial arm of the Tata Group, is the latest contender in the race for a buyout of Thomas Cook India. Private equity investors Kohlberg Kravis Roberts (KKR), Carlyle, and Travelex are among the known bidders.Thomas Cook Group PLC is in the process of selling its 77.1% shareholding in Thomas Cook (India) Ltd (TCIL).

Executive Tracking Avigos Girija Tripathy quits, to start own fund

Barely five months after joining the private equity firm Avigo Capital as a Partner, Girija Tripathy has left the company. He is now planning to start a mid-market-focused buyout fund and looking for investors to partner with. Tripathy had joined Avigo in October last year from Singhi Advisors Ltd, a boutique investment bank.

HSBC PE, ePlanet to exit Trivitron

HSBC Private Equity and ePlanet Capital are planning to sell their stake in Chennai-based medical diagnostics firm Trivitron Healthcare. Both PE firms had invested close to $11mn in Trivitron Healthcare in 2007, picking up minority stake in the company. Trivitron Healthcare is one of India's largest medical technology company, involved in designing and manufacturing of medical devices.

Fullerton Elevates Rajnish Kumar as CEO

Equity broking and wealth management company Fullerton Securities & Wealth Advisors has elevated its executive vicepresident Rajnish Kumar as chief executive officer. In his new role, Kumar will be responsible for strengthening the wealth management business and defining its strategy in the Indian market.

Gini & Jony eyes stake sale as Reliance Capital pushes for exit

Indian Private Equity Weekly Update 2nd 8th April, 2012

M&A Activities
During the week ended 8th April, 2012, there were 10 M&A deals worth $57.84mn (size of 6 deals were not known). In the biggest deal during the week, Tirupur-based PGC Textiles Ltd is buying out the 14% stake it does not own in the Swiss apparel firm Switcher for $30mn.

M&A Activity: Summary during the week

Acquirer PGC Textiles Ltd OCS Group Kajaria Ceramics Tyroo Media Jasper Infotech Larsen & Toubro Ltd Jagran Prakashan Bajaj Auto Gerresheimer AG DMI Finance Target Switcher Absotherm Facility Management Services Pvt Ltd Vennar Ceramics DGM India eSportsBuy.com Thalest Group NaiDunia Media Pvt Ltd KTM Power Sports Neutral Glass & Allied Industries Alchemist Asset Reconstruction Company Target business Manufacturing-textile Facility management Manufacturing-tiles Media & Entertainment Ecommerce Engineering Media & Entertainment Manufacturing-auto Manufacturing BFSI Stake (%) 14 51 51 100 NA NA NA 6.3 NA NA Deal value ($ mn) 30 24.5 2.68 0.66 NA NA NA NA NA NA

Source: Four-S Database, Acquisition price is in $mn

Indian Private Equity Weekly Update 2nd 8th April, 2012

Market Update

Key Domestic Indices

Index BSE Sensex S&P CNX Nifty CNX Nifty Junior Nifty Mid Cap 50 CNX IT Bank Nifty CNX Infrastructure CNX Realty
Source: BSE, NSE

Indian Market Movements 52 Week 30-Mar-12 4-Apr-12 Change (%) High Low 17,404.20 17,486.02 0.47% 19,811.10 15,135.90 5,295.55 5,322.90 0.51% 5,944.45 5,187.85 10,450.20 10,650.65 1.88% 11,758.15 10,176.30 2,301.00 2,346.05 1.92% 2,657.10 2,274.75 6,516.00 6,539.90 0.37% 7,344.90 6,426.50 10,212.75 10,340.10 1.23% 11,978.05 10,038.90 2,509.15 2,561.05 2.03% 3,217.50 2,470.65 239.05 241.55 1.03% 344.05 234.55

Key Global Indices

Global Market Movements Index 30-Mar-12 5-Apr-12 Change (%) NASDAQ 3,091.57 3,080.50 -0.36% Dow Jones Industrial Average 13,212.04 13,060.14 -1.16% S&P 500 1,408.47 1,398.08 -0.74% NIKKEI 225 10,083.56 9,767.61 -3.23% Hang Seng 20,555.58 20,593.00 0.18% Straits Times Index 3,010.46 2,986.20 -0.81% FTSE 100 5,768.45 5,723.67 -0.78%
Source: Yahoo Finance

52 Week High Low 3,090.08 2,298.89 13,289.08 10,404.49 1,414.00 1,074.77 10,207.90 8,135.79 24,468.64 16,250.27 3,227.28 2,521.95 6,103.73 4,791.01

Indian Private Equity Weekly Update 2nd 8th April, 2012

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Indian Private Equity Weekly Update 2nd 8th April, 2012