Private equity investors Franklin Templeton Private Equity Strategy, a fund managed by Franklin Templeton Asset Management (India) Pvt Ltd; Aureos South Asia Fund and ePlanet Capital have taken up a majority stake in Newgen Imaging Systems Pvt Ltd, a Chennai-based unlisted e-publishing outsourcing firm, according to two people with knowledge of the matter.
According to Balaji Srinivas, managing director, Aureos India Advisors Pvt Ltd, the company was convinced about the opportunity in the outsourced publishing space, specifically in the opportunity that presented itself in the digitisation of books.
The buyers have acquired a 60-per cent stake in Newgen for around Rs100 crore, according to a person directly involved with the deal, cited by Mint newspaper. The person requested not to be named as he was not authorised to speak to the media.
The stake was acquired from Carlyle Asia Venture Partners II, a growth capital fund managed by global investment manager Carlyle Group, which invested $10 million in 2004 and upped its stake with another investment in 2006. The persons said, Carlyle would exit the company with the stake sale.
Veda Corporate Advisors Pvt Ltd, a Chennai-based investment bank acted as the adviser to the deal.
Newgen, was founded in 1996, and offers services, particularly to publishers in the US and Europe. It provides project management service for books and journals and taking up such responsibilities as author liaison, development editing, copy editing, design, artwork and permission, typesetting, composition and ebook delivery.
According to analysts, e-publishing is on the rise due to increased outsourcing being done internationally in the publishing space. They say some other industry drivers include increase in broadband penetration, private schools adopting hybrid teaching methods, and foreign universities offering online courses.
Secondary deals, or private equity fund to private equity fund deals have emerged as a popular exit route for investors due with the volatility in the capital markets.
The value of secondary deals more than doubled to $125 million with eight deals in January-June this year, as against $59 million across nine transactions in the year-ago period.
Launched in 2002, with $164 million under management, Carlyle Asia Venture Partners II has made several venture and growth capital investments in Asia. Among the other exits it made are Quality Engineering and Software Technologies Llc and Worldzen Holdings Ltd.
Source: Domain B