Total value of exits by PE and VC funds declines marginally in 2016
The year that is coming to a close has seen total private equity (PE) and venture capital (VC) exits aggregating to $6.3 billion across 198 deals, against $6.5 billion across 249 deals last year, according to data provided by EY.
There was a decline in both secondary exits (PE to PE sales) and strategic exits, or sales to third parties often operating in the same industry as the company in which the investors are selling their stakes.
The top 10 exits accounted for 55% of overall exits value, data shows. “Exits started promisingly with the $1-plus billion exit of KKR (from Alliance Tires) in March 2016 but ended marginally lower than 2015,” said Mayank Rastogi, partner and leader of the private equity practice at EY.
Here is the list of top five exits in 2016:
Alliance Tire Group: KKR, IFC ($1.05 billion)
KKR sold its entire stake in Alliance Tire Group (ATG) which it acquired three years ago to Yokohama Rubber Co. of Japan.
Under the deal, Yokohama Rubber, which makes passenger car tyres, bought all shares owned by KKR, International Finance Corp., and others.
KKR had invested $460 million for an 87.48% stake in ATG in April 2013. ATG has two plants in India and one in Israel.
ALSO READ: PE/VC investments slow down in 2016 after scaling a peak in 2015
Gland Pharma: KKR ($556 million)
KKR also sold all of its investment in Gland Pharma Ltd.
In July, Shanghai Fosun Pharmaceutical (Group) Co. Ltd agreed to acquire Gland Pharma Ltd in a deal worth $1.3 billion (Rs8,700 crore).
Under the agreement, Fosun bought a stake of about 86% in Gland Pharma, including the 36% held by KKR & Co.
KKR had acquired the Gland Pharma stake in 2013 for $200 million from Evolvence India Life Sciences Fund. At a valuation of $1.3 billion for 86%, KKR’s 36% stake was valued at $540 million.
Minacs: CX Partners, Capital Square Partners ($420 million)
In July, India-focused PE firms CX Partners LLP and Capital Square Partners Pte. Ltd exited their investment in business process outsourcing (BPO) firm Minacs Ltd, selling it to US-based Synnex Corp. for $420 million.
Minacs was acquired by the current owners from Aditya Birla Nuvo Ltd for $260 million in 2014. In 2006, TransWorks Information Services Pvt. Ltd, a unit of Aditya Birla Nuvo Ltd, had acquired Canadian firm Minacs Worldwide Inc. for $125 million.
International Tractors : Blackstone ($250 million)
Blackstone Group LP decided to exit its investment in International Tractors Ltd (ITL) by selling its 17.75% stake to Japan’s Yanmar Co. Ltd for Rs1,700 crore. Blackstone, which had invested about $100 million (Rs520 crore then) for 12.5% in ITL in 2012, subsequently raised its stake to 17.75%. Yanmar already owned 12.5% in ITL.
The company was valued at about Rs4,200 crore when Blackstone acquired the 12.5% stake in October 2012.
Equitas Holdings: IFC, Sequoia Capital, CLSA, FMO, Helion Ventures, Acquarius, Aavishkaar Goodwell, Lok Capital, Indian Financial Inclusion Fund, MicroVentures, Creation Investments ($217 million)
In April, Equitas launched its initial public offering (IPO), when some of its investors sold all or some of their shares. Six foreign investors—Sequoia Capital India Investments III, Aavishkaar Goodwell India Microfinance Development Co. Ltd, Aquarius Investments Ltd, MVH SpA, Lumen Investment Holdings and WestBridge Ventures II Llc—exited fully. International Finance Corp., Dutch development finance institution FMO and Helion Venture Partners, LLC sold some of their shares.