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BIGGEST PE DEALS
Golden handshakes
Get savvy about the biggest private equity deals over the last year, the biggest dealmakers and what Venture Capitalists look for when zeroing in on potential start-ups! Also in this package, meet the stalwarts at Saif Partners and Bessemer Venture Partners to get a grip on their India strategy. Plus, columns by entrepreneurs who made it big with timely PE investments...
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 Investee: Vatika Group
Investor: Wachovia Bank, Baer Capital & GS
Investment Value: $250 mn
Sharad Jhingan, CFO, Vatika Group told 4Ps B&M, “The major rationale for this deal for Vatika Group was indeed the capital. Apart from that there are many advantages that any company can have by tying up with good partners for their business and accepting funding by an international or multinational investors and the same accrue to Vatika as well. For any company like Vatika, you get a lot of global practices migrating into the corporate governance and after some time one can build a robust Corporate governance model. The set of investors that one get are not passive investor but active investors, which play a role in the decision making process. Everything that you do is scrutinised and you need to justify your action. This leads to a whole lot of transparency creeping into the organisation. If you plan to get listed, then the big metamorphosis is taking place rapidly. Your equity increases, your valuation improves, the worth of company is now established as you have foreign investors. All this helps you to leverage more and borrow more and grow more. From an old company, which was seen as very small you become very large and people accept you as very large. We see this relationship as a win-win situation for all the parties as we are partners in progression.”
Vatika Group has witnessed three big institutional investors, which have poured in funds to the tune of $250 million. The net worth of the Vatika Group’s real estate business was estimated at Rs.8,000 crores when this deal was struck. According to the company, these funds would help the company in its existing projects and also assist in consolidation of land banks that would help in acquiring new projects. Vatika is also evaluating plans to enter the stock market through an IPO but they are awaiting the right time.
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 Investee: UEL (Eenadu Group)
Investor: Blackstone Group
Investment Value: $275 mn
UEL Chairman Ramoji Rao was quoted as saying that “the company had several financing options, including an initial public offering, but we went with Blackstone because we wanted to leverage the group’s experience and track record in the global media sector, and which has holdings in some of the fastest-growing media firms in the world that include Sirius Satellite Radio, VNU, CineWorld and Universal Orlando.” No doubt, a good decision by UEL, as the industry where the group is dominant has definitely changed over the last few years. Due to increased competition, margins of Eenadu Group have eroded. And, therefore, a capital infusion seems quite timely for the company.
Amidst the deluge of PE investments into the Indian telecom and realty sectors, Indian media was definitely not a silent viewer. It got its fair share of PE attention when Blackstone, the world’s largest leveraged-buyout firm, pumped in $275 million into Ushodaya Enterprises Ltd. (UEL) to pick up a 26% stake in the Eenadu Group that owns the leading Telugu daily Eenadu and one of the largest private television networks in the country, ETV. However, according to sources, Blackstone has subsequently reduced the size of the planned deal and, under the amended terms, it is looking at a 14% stake for Rs.590 crores or a little less than $150 million in UEL – all due to hurdles in obtaining the green signal from the Foreign Investment Promotion Board. But, according to latest reports in leading news dailies, Blackstone has succeeded in getting the Finance Minister P. Chidambaram to formally sign on a revised deal to invest around $150 million in UEL. It seems that the deal is finally taking shape.
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