Carlyle, TPG eye NIIT Tech pie

New Delhi-based IT company NIIT Technologies is learned to be in preliminary discussions with private equity players Carlyle and TPG to sell a majority stake. Industry sources said a strategic investor is also believed to be interested in the transaction.

Promoters currently hold 40% stake in NIIT Technologies and sources said they may sell anywhere between 25% and 40% in the company. This would trigger an open offer, where investors can buy an additional 20% in the company.

The company had earlier said that it is open to a stake sale to a financial or a strategic investor. “The company will dilute 25% out of the nearly 40% stake held by promoters to a strategic investor and this has been our position. This will naturally lead to an open offer.

With the company having a market capitalisation of Rs 1,309 crore, a 60% stake in the company will cost around Rs 1,000 crore, depending on the premium that investors are willing to pay the promoters.

Read more in The Economic Times article.

Carlyle, Citi eye 15% in Pyramid Saimira

Private equity majors Carlyle Group and Citigroup Venture Capital International (CVCI) are in the race to acquire a 15 per cent equity stake in Pyramid Saimira Theatre, a Chennai-based theatre chain company.

Pyramid Saimira Theatre is offloading a 15 per cent stake to the private equity investors at around Rs 420 to Rs 445 a share, which is nearly 31.6 per cent premium to the current market price of Rs 338.Sources said two more investors were also in talks with the company for the stake.

In addition to the 15 per cent stake in the listed entity, the group was also likely to sell around 15-20 per cent stake in its unlisted production company, Pyramid Saimira Production.

Read more in The Business Standard article.

Citigroup VC favourite for Pyramid Saimira stake

Private equity major Citigroup Venture Capital (CVC) has emerged as the front-runner for acquiring stake in Pyramid Saimira Theatres (PSTL) and its subsidiary Pyramid Saimira Productions (PSPL) for around $100 million (around Rs 400 crore). The companies are expected to make an announcement by month-end.

Other global financial majors like Caryle Capital, ABN Amro and Grant Thornton are also in talks to acquire a 14.9% stake in PSTL and 26% in PSPL.

According to sources close to the development, a 45-day due diligence by CVC is in its final stages, on completion of which the companies are expected to announce the deal.

When contacted, PSTL director Nirmal Kotecha admitted that that the group was in talks with five-six private equity majors for offloading stake.PSTL was looking at raising funds of around $150-200 million for its acquisition and expansion plans.

Read more in The Business Standard article.

Private equity firms invest record $3.8 bn in India

Global private equity firms, including Blackstone and Carlyle Group, have made an investment of $3.8 billion in 2007 so far in the country, up 50 per cent from the year-ago period.

The record volume has been reached through 81 M&A deals. Last year, foreign private equity players had invested $2.6 billion, data complied by global consulting firm Dealogic showed.

Carlyle Group is the leading "financial sponsor" in India with investment of $777 million via two deals, including acquisition of over six per cent stake in HDFC.

It is followed by Dubai International Capital, which acquired a 2.87 per cent stake in ICICI Bank for $741 million, and Blackstone Group with $619 million inflow via eight deals.

Blackstone Group, the world's leading private equity firm, has acquired stake in companies such as Intelenet Global Services, Punj Lloyd and Gokaldas Exports.

The US-based Group has also decided to pump in $150 million to acquire a stake in Nagarjuna Construction Company. A move that comes close on the heels of its decision to acquire up to 70.1 per cent stake in Gokaldas Exports, the country's biggest apparel exporter, for about Rs 675 crore.

Blackstone Group manages around $90 billion of assets worldwide. In January, it invested about $275 million in Ushodaya Enterprises Ltd (UEL), a media and film production company owned by Ramoji Rao.

HCLT, Carlyle out of race for Cambridge stake

Global private equity fund Carlyle and Indian software services major HCL Technologies are reported to have dropped out of the race to acquire a 48 per cent stake in Cambridge Solutions – a Bangalore-based Rs 1,200-crore IT and BPO services provider.

According to sources, the two firms opted out of the Rs 650-crore deal due to price differences with a group of promoters who are looking at exiting.

Meanwhile, a senior executive of the company said two other global PE funds had evinced interest in the stake. “One of them is from the US and the other from Europe. Both are blue-chip PE funds and one of them is expected to align with Ramesh Vangal, who holds 13 per cent in Cambridge,” the executive added.

Read more in The Business Standard article.

Carlyle invests $41 mn in Great Offshore

US-based private equity firm Carlyle on Friday said it has invested $41 million in Great Offshore, a city-based service provider engaged in the oil and gas sector.

The investment has come through Carlyle Asia Growth Capital Partners, a $680 million fund."Great Offshore is well poised for a tremendous growth in size and profitability, enabled by a strong management team, a relatively under leveraged balance sheet and a favourable macro environment," Carlyle India Managing Director Shankar Narayanan said.

Carlyle Asia Growth Fund invests in 'high-growth companies' in India, China, Japan and South Korea. It works with ONGC, Reliance, Cairn, British Gas, Shell, British Petroleum, Exxon Mobil and Saudi Aramco in India and the Gulf.

Lehman, Warburg, Carlyle eye 20% of Angel Broking

Leading private equity investors Lehman Brothers, Warburg Pincus and Carlyle Group are in talks with Angel Broking to buy a 20% stake in the Mumbai-based retail broking firm.

Angel Broking is the latest to join the PE bandwagon after leading industry players like Motilal Oswal Securities, Edelweiss Capital and India Infoline roped in equity partners in the past. Angel is planning to raise about Rs 200 crore through the placement, pegging the broking firm’s valuation at around Rs 1,000 crore.

Investment banker Rothschild has been given the mandate to find equity partner and the deal is expected to be sewed up by September-end.A 100% retail player, Angel Broking has chalked out an expansion plan under which it has identified 250 new locations in addition to its existing branch network of 70. It offers a range of services like broking, research, investment advisory, wealth management, e-broking and commodities trading to about two lakh clients.Angel Broking records daily business volumes of Rs 1,500 crore and enjoys about 3% market share.

Read more in The Economic Times article.

HDFC to place 7% equity with Citi,CMP Asia

Housing Development Finance Corporation Ltd will issue total 1.8 crore shares or 7.11 per cent equity to Citigroup Strategic Holdings Mauritius and CMP Asia of the Carlyle group. The preferential allotment was cleared by shareholders at the annual general meeting Wednesday.

The shares will be allotted at Rs 1,730 each, a discount of Rs 152 to the current market price of Rs 1,882 on the National Stock Exchange. The stock is today up nearly 1 per cent over Wednesday.

Citigroup Strategic Holdings Mauritius already holds 9.15% equity in HDFC. Post -allotment, its stake will rise to 9.55 per cent. CMP Asia will hold 5.63 per cent post allotment, against nil now.

Read more in The Economic Times article.

Patni nears $25 mn European buy

IT major Patni Computer Systems is close to acquiring a European IT company for $20-25 million (around Rs 100 crore) and is expected to announce the deal in the next two months.

The acquisition gains importance as two private equity majors – Apax and Carlyle – are in advanced stages of discussion to acquire a 20 per cent stake in the Indian IT major from two of its largest shareholders — Ashok Kumar Patni and Gajendra Kumar Patni — who together own about 29 per cent.

According to sources close to the development, Patni has finalised the takeover of a European company operating in the media and telecom space, whose name is still under wraps. The acquisition is on a minus 45-day period (means would close in 45 days) and a subsequent announcement will be made.

Earlier in June 2006, the company acquired US-based ZAiQ Technologies, an application specific integrated service (ASIC) design firm in an asset purchase transaction of $425,000.

Read more in The Business Standard article.

Carlyle, Apax join race for Patni stake

A clutch of top private equity guns, including Carlyle and Apax Partners, have shown interest in buying a large stake in Patni Computers, but the success of their venture depends on whether they can win crucial management rights and also secure the co-operation of Narendra Patni, the CEO and chairman.
Mr Patni, who is believed to be interested in continuing in his position after the exit of his brothers, has employment contracts that protect his interests till 2013.

According to the prospectus filed with the Securities and Exchange Commission (SEC) prior to its ADR issue on the NYSE, Mr Patni’s (Narendra) term as the chairman of the board of directors of his company ends in December 2008. However, he still has the option to continue for another 5 years in the same position in Patni Computers. Also, since Mr Patni’s consultancy agreement has been extended by the board of directors, he would also be able to continue as the CEO of the company till 2010. This is crucial to any new investor for the company, as they then would have to strike some kind of a compromise with Mr Patni in order to run the company.

Read more in The Economic Times article.

9 giants in race for RCoM's tower biz

As many as nine investors are currently in talks with Reliance Communications (RCOM), the country’s second-largest wireless service provider, for picking up a minority stake in its telecom infrastructure business. RCOM is currently in the process of spinning off its telecom infrastructure into a separate company — Reliance Telecom Infrastructure Limited (RTIL).

According to RCOM sources, the companies that are currently engaged in carrying out due diligence of RTIL include global tower infrastructure majors— Tower Vision and American Towers, private equity investors—Apax Partners; Carlyle; and Temasek, the private equity arms of HSBC and Deustche Bank, and financial investors—George Soros, Blueridge and US-based Tiger.

The company is looking to divest up to 26% stake in RTIL to strategic investors and has been in negotiations with many investors over the last 2-3 months. Sources in the industry say the deal could be in the range of $1 billion for a minority 26% stake in the telecom major’s tower business, pegging the valuation of the tower company at $4 billion.

Read more in The Economic Times article.