On Sunday evening, private equity investors — the US-based 3i, Oman Investment Fund (OIF) and Cisco, a multinational technology company — together invested $125 million (Rs 552 crore) in unlisted Nimbus Communications for a 28.5% stake in the company.
Nimbus has interests in media, entertainment and sports. It also holds the International Cricket Council's (ICC) broadcast rights until end-2007.
All the three investors will subscribe to convertible bonds, which will later be converted into equity shares before Nimbus' public offer in 1-3 years.
Harish Thawani, Nimbus' executive chairman, said the money will be utilised to expand the company's international sports business and diversify into football and golf.
A part of the funds will also be utilised to finance Indian language films, international film production and distribution, developing digital content for wireless and IPTV platforms and to expand the company's broadcasting operations.
While Nimbus earns 70% of revenues from cricket—-it holds BCCI rights for domestic and international matches played by India between 2006-2010 — Thawani said football and golf are the fastest growing sports business in the world and Nimbus wants to tap these.
Industry sources said the company is close to acquiring long term management rights with the European PGA Tour to bring golf into Asia. On the football front, Nimbus may bag one or two European league matches.
For 3i, one of the largest US private equity funds, which manages close to $10 billion globally, this is the second investment in Nimbus.
In 2005, the fund had invested $45 billion for a 33% stake in the company. In the current tranche, it has put in $30 million for 6.5%__a function of the fact that Nimbus' valuation has shot up over the last 18 months.
OIF, promoted by Sultan of Oman, has invested $75 millon for an 18% stake while Cisco got 4% for $20 million. London-based boutique Euromax Capital Partners and Enam were advisors to the transaction.
Nimbus' current revenues stand at $310 million, up from $70 million when 3i first picked a stake in it. Over the last five years, the company has received close to $200 million (Rs 900 crore) in foreign investments.
PE investors eye returns in the region of 20-25% — a number Nimbus has delivered on. Cisco's strategy is complimentary to its own line of business.
It has hooked on to Nimbus' digital content model to promote innovative uses of internet and networking technology.