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For the first time, private equity (PE) investments in India have crossed the $10-billion mark in a calendar year. And that too, with over three months still to go in 2007. The magnitude of the growth can be gauged by the fact that in 2006, the total value of PE deals announced stood at $7.86 billion. With the PE industry on fire and with strategic mergers & acquisitions (M&A) building on the big-budget deals struck early this year, the total value of equity deals involving Indian companies is now nudging the $60-billion mark. For the January-August period, the total value of PE deals announced stood at $10.8 billion spread over 267 deals, according to the latest dealtracker of advisory firm Grant Thornton. PE funds have been flexing their muscles in equity transactions in the country, and even surpassed strategic M&As in the value of deals struck during June and July. In June and July, PEs totalled $4.6 billion while M&As were valued at $2.66 billion. But in August, M&As clawed back with the cumulative value of deals pegged at $3.37 billion over 62 deals compared to $1.22 billion worth of PE deals through 30 deals. […]
UK-based private equity firm Bluewater International Investment Ltd plans to invest Rs 500 crore in India to tap the lucrative healthcare sector by setting up a multi-speciality hospital with a medical training centre. The company, which has already lined up multi-million dollar investments in India's real estate space, is also contemplating tie-ups with various foreign and domestic varsities for accreditation of its proposed medical training centre. “Indian healthcare sector has seen an exponential growth in the past couple of years and a lot of PE funds are eyeing the sector for their investments. Instead of investing in a running firm, we are planning to foray into the sector on our own with a planned expenditure of Rs 500 crore,” Bluewater Investments Chairman and Managing Director Ved Goswami said. He said the firm plans to set up a multi-speciality medical facility in India with equity participation from global healthcare professionals. “Though Bluewater would hold a majority stake in the venture, we would seek equity participation from various international medicine practitioners also. We also want to set up a medical training institute for which we are in the process of tying up with domestic and foreign medical schools,” he said. […]
It was a particularly trying moment in the negotiations. Blackstone, the US private equity giant, was in last-minute negotiations with the promoters of the Andhra Pradesh-based Ushodaya Enterprises, owners of Eenadu and ETV, to buy a stake in their media business. Broad details had been agreed upon and documents were being prepared when the deal makers realised that the structure can be tweaked slightly. A plain vanilla equity structure (with cash being brought in lieu of equity shares) was fine, but a higher return can be squeezed out if preference shares could be added. The question then was about the fixed dividend on the preference shares. The Blackstone team debated the issue for a long time, but it was proving to be a knotty problem. The dividend should be high enough to cover Blacktone’s interest costs otherwise it wouldn’t make sense. Akhil Gupta, the chairman and managing director of Blackstone Advisors India, didn’t bat an eyelid. “4.5%. It should be at least that much to cover the interest Blackstone is paying globally,” he told his team. In the end, they didn’t have to worry. Blackstone and Ushodaya opted for equity shares. But the incident highlighted Mr Gupta’s level of preparedness and attention to detail. […]
The members of Vadodara Stock Exchange (VSE) raised Rs 12 crore by divesting over 51% of its total equity as part of its demutualisation process. The deadline set by Sebi for the second and last set of stock exchanges to complete their demutualisation process came to an end on Friday. “With September 14, 2007, being the last date to complete the demutualisation process, VSE has completed the process well within the deadline set by market regulator,” VSE MD Dipak Raval said. Around 29 investors have picked up stake in 15-year-old regional stock exchange. Some of the investors include companies like Financial Technologies, one of the promoters of Multi Commodity Exchange of India (MCX). Other players include Amod Stamping, Lisa Finevest and Pratham Group company-Pratham Investment. A senior official of Reliance Group has also been allotted 2% in VSE. According to Mr Sanjiv Shah, Sebi nominee on VSE board, eight corporate houses have been allotted 26% of VSE’s total equity. “We expect that with prominent corporate houses as VSE’s shareholders, the market value of the exchange would go up further,” added Mr Shah. […]
The race for IFCI has entered the final stage with 10 bidders – both domestic and international – in the fray to acquire up to 26% stake in India's oldest financial institution. While the names of bidders will only be known on Saturday afternoon when the expression of interest is opened, the only name that was confirmed was a consortium comprising Japan's Shinsei Bank, US investor JC Flowers and state-run Punjab National Bank. PNB and IFCI had earlier agreed on a merger proposal brokered by government but deal fell through since the bank's management felt that the FI did not fit into its portfolio. But a change of management at the bank and IFCI's recovery have forced a rethink. While there were reports of Blackstone, Cargill, WL Ross and IDFC too submitting bids on the last day, at least two players – IDBI and Life Insurance Corporation – who already hold stakes and were widely expected to bid were absent. […]
The Aditya Birla Group is set to broaden the ambit of its financial services business by foraying into new segments that offer high growth. The Birlas are looking at the option of entering into real-estate funds, private-equity fund, brokerages and non-life insurance businesses, according to a source familiar with the matter. An Aditya Birla Group spokesperson declined to comment. The group is now present in life insurance, retail and corporate financing, asset management and distribution businesses. It has partnerships with Canadian financial services major Sunlife for its life insurance and asset management businesses. […]
Ipca Laboratories has acquired 100% shareholding of a small formulation product dossier registration-cum-distribution company in Australia. According to a release issued by Ipca to the BSE today, the Australian company currently holds five formulation registration dossiers. The release, however, did not mention the name of the Australian company. “The Australian company also has a wholly-owned formulation dossier registration-cum-distribution company in New Zealand currently holding three formulation registration dossiers in New Zealand,” the release added.(Business Standard) […]
Firms are opting for acquisitions over new projects as operational hospitals mean immediate revenue at lower costs. For an industry that is moving faster than fire in a vineyard, having to wait for more than five years just to get a green field project going can be rather frustrating. But increasingly now, in the healthcare industry, numerous hospital chains — in attempts to clamp down on their waiting periods, boost cash flow and expand into other parts of the country — are on the prowl for strategic acquisitions of other hospitals. Fortis Healthcare’s 46 per cent acquisition of Chennai’s famous Malar Hospitals last week was the second such acquisition for the north Indian hospital chain and also marked its first step into the south. Previously, in 2005, Fortis had acquired 90 per cent in the Escorts Heart Institute in Delhi along with three other Escort hospitals in Amritsar, Faridabad, and Chhattisgarh and a vacant plot marked for an Escorts hospital at Jaipur for more than Rs 600 crore. Towards the end of 2005, Apollo Hospitals acquired 51 per cent stake in Bangalore’s Imperial Cancer Centre and Multi-Specialty Hospital for Rs 35 crore, having already acquired Gleneagles Hospital in Kolkata, Sagar Hospital in Mysore and hospitals in Kakinada, Chennai and Madurai. Today, roughly 5-6 per cent of Fortis Healthcare’s entire revenue comes from Escorts alone. The acquisition that put the company on a financial backfoot that will only break next year, in retrospect, worked brilliantly for Fortis. […]
Chennai-Based healthcare IT services company Helios & Matheson is targeting a $50-100 million all-cash buyout in Europe. It is in talks with two companies, one in Brussels (Belgium) and the other in Paris. The company hopes to close the deal by end of this fiscal. “We are looking at a foothold in Europe. The company has a cash reserve of Rs 85 crore. Another Rs 60-70 crore can be raised through internal accruals. We plan to complete the transactions in three phases (in two years time) but all through cash. We can also borrow from banks, if there is a need, “ said Helios & Matheson MD GK Muralikrishna told ET. Helios and Matheson has so far acquired three companies in the US — The Laxmi Group in California (2001), Maruthi Consulting Inc (2004) and The A Consulting Team (now renamed Helios & Matheson, US in 2006). […]
Nabard, the apex rural development bank in India; Cordaid, a Dutch non-governmental development organization; CEP Investment Trust Fund, a Canadian social venture fund supported by CARE Canada; ENAM Capital, part of ENAM group, a leading Indian financial services conglomerate; Lesing Nominees and Aavishkaar International announced their joint investment in the India-focussed pioneering micro equity fund, Aavishkaar India Micro Venture Capital Fund. This joint investment raises Aavishkaar’s fund corpus to $6 million and will support the launch of up to 60 socio-commercial businesses in India over the next 5 years. The fund aims to double its corpus size in next six months by attracting more global investors. Aavishkaar India Micro Venture Capital Fund commenced operations in 2002 and is aimed at promoting economic growth in rural India by supporting innovation driven bottom-up companies in sectors such as agriculture, rural businesses, handicrafts, renewable energy, healthcare and technology for development. […]
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