The Brief mergermarket’s Weekly Private Equity Round-Up 4 December 2009 | Issue 41 Editorial 1 The Noticeboard 2 Private Equity Opportunities 3 Deals of the Week 9 Pipeline 16 Statistics 19 League & Activity Tables 22 Top Deals 31 Investor Profile: Blackstone Group Holdings LLC 34 Notes & Contacts 36 The Week That Was..... The last seven days: private equity in review Over the past seven days, global private equity deal Mongolia-based Gobi Coal and Energy from En+ Group making was steady but somewhat unspectacular with for US$25m. Although the value of the deal falls firmly 15 transactions coming to the market, worth a collective in the lower end of the market, it is the largest private US$2.57bn. The top deal of the week was seen in Italy equity-related deal announced in Mongolia this decade. where Bridgepoint Capital and AXA Private Equity moved to acquire the gaming business of Snai, the company Deal flow over the second half of 2009 has certainly engaged in the design, construction and provision of suggested that private equity houses are becoming technology and services in the gambling industry, for a increasingly willing to return to the market after the total consideration of US$898m. global financial crisis. However, this week there was a sharp reminder to the asset class that the effects of The deal could prove to be an astute investment by the the economic downturn will be felt for some time yet buyout houses with Italy’s gaming market the second with beleaguered buyout firm Candover announcing largest in Europe and tipped to see annual growth of that it has agreed with investors to terminate the €3bn around 4-6% over the next five years. The offer will also fund it raised last year. Not so long ago Candover was help Snai reduce its overall net debt of approximately part of consortiums that bought out Expro International US$410m. Significantly, the company also operates (US$3.88bn) and Coral Eurobet (US$3.8bn), how the Milan’s San Siro gallops and racetracks although these mighty have fallen. assets are not part of the acquisition. By Tom Coughlan, Remark The US$898m buyout currently stands as the second largest private equity-related deal announced in Italy this year, only surpassed by the US$2.43bn acquisition of gas distribution company Enel Rete Gas in May. Remarkably, AXA Private Equity was also involved on the buy-side of this deal, teaming up with Italian investment fund F2i to acquire an 80% stake in the company. Elsewhere, one of the more noteworthy deals of the week saw a consortium of investors comprising Origo Sino India, Origo Resource Partners and China Commodities Absolute Return acquire a 31% stake in The Noticeboard People moves Date Title Story snapshot Source 3-Dec-09 Brown Brothers US-based investment bank Brown Brothers Harriman has appointed Douglas www.privateequityonline.com hires former Maine as a senior advisor to its M&A advisory and private equity unit, BBH Capital IBM executive Partners, which closed its third and latest fund on US$200m in 2007. Maine is the former CFO of IBM and also the former CFO of MCI Communication, where he worked for 20 years. 3-Dec-09 Barclays Capital Barclays Capital has appointed Jacqueline Tan to the position of Managing Director, www.barcap.com appoints head of Head of Risk Solutions Group, Southeast Asia. Based in Singapore, Jacqueline Risk Solutions will oversee the delivery of risk solutions to the firm’s Southeast Asian clients. Group Jacqueline formerly served as Head of Corporate Risk Solution Sales in Asia for ABN Amro in Singapore. 1-Dec-09 Coller executive Coller Capital executive Pinal Nicum will end an eight-year career with the firm www.privateequityonline.com joins Adams to become a partner at Adams Street Partners, where he will focus on the firm’s Street as secondaries operations in Europe alongside four other partners. Adams Street partner raised its first dedicated secondaries fund in 1988 and has since closed over 100 secondary deals. It has US$3.4bn of secondary assets under management. 1-Dec-09 Head of International private equity firm Kohlberg Kravis Roberts (KKR) has witnessed the www.privateequityonline.com European departure of Christina Pamberg, head of European investor relations and capital investor raising activities since 2005. KKR recently hired Alex Fletcher, the former head of relations leaves Goldman Sachs Asset Management EMEA sales, to lead its European client and KKR partner group. New funds Date Title Story snapshot Source 3-Dec-09 Corsair Capital Corsair Capital, the US-based private equity firm investing in the Financial Services www.altassets.com sets US$2bn sector, will target US$2bn for its fourth fund, Corsair IV Financial Services Capital target for fourth Partners. The firm enlisted a placement agent to raise public funds for Corsair IV fund and has argued against a ban on placement agents by the SEC as a ban would hinder the fundraising efforts of smaller funds. 3-Dec-09 Alternative Alternative Investment Capital, the Japan-based fund of funds in which Mitsubishi www.altassets.com Investment owns a majority stake, will launch its third Asia-focused fund, The AIC Japan III Capital to raise Fund. AIC has a total of US$2.7bn total assets under management and since third Asia- its formation in 2002 is thought to have committed US$634m to private equity focused fund through a series of funds internationally. 1-Dec-09 Cordiant Capital Canada-based emerging markets private equity investor Cordiant Capital has www.cordiantcap.com to oversee been selected to manage the newly created Infrastructure Crisis Facility Debt infrastructure Pool, which was launched at the annual World Bank Group meeting this year. The fund ICF will oversee development and address financing concerns of infrastructure projects in emerging markets. 2 The Brief: 4 December 2009 | Issue 41 Private Equity Opportunities - Asia-Pacific Adishwar India could sell a minority stake once annual revenues pass INR2bn, MD says Date Value Currency Value Sectors Companies Countries Intelligence grade (M) description 26-Nov-09 10 US$ Stake size Consumer: Retail ING Vysya Bank; Adishwar India Confirmed India Limited Adishwar India, a private Bangalore, India-based consumer goods retailer, could sell a minority stake for INR500m (US$10m) in FY 2011/2012 when revenues are expected to touch INR 2.25bn, Managing Director Paras Jain said. Revenues for year ended March 2009 were INR1.47bn, Jain said. FY 09/10 revenues are estimated at INR1.75bn. Expansion plans will be finalized after the current financial year, at which point the company would be willing to hear from advisors and financial investors. It is very unlikely to sell a stake to a strategic player since it has the expertise required to run its operations, he said. The fund raised would be used to open more stores. At present, the company is not in a hurry to open too many because of the recent retail slump so it does not require funds immediately. It expects to fetch a better valuation once its revenues cross the INR2bn threshold, he said. The company is wholly owned by Jain and his family. It has 421 employees. Total debt as on March 2009 was INR200m. ING Vysya Bank was the debt provider, he added. It will raise the equity only if the present retail space shows signs of improvement and there is scope to increase annual revenues to around the INR 7bn level with the INR 500m raised. If it fails to get the right valuation it could consider debt but would prefer equity to avoid the burden of interest payments, he said. The company has no listing plans since its revenues are too small but it could consider that in the future, he said. Adishwar has 21 stores in Bangalore and one store each in Mysore, Mangalore and Belgaum. It plans to add four to six more stores by March 2010. Going forward it will explore other cities such as Chennai, Goa, Hyderabad and Pune. All of its stores have been profitable since the first year of operations, he said. This news service reported in April 2008 that Adishwar India might consider private equity bids of over US$25m within 2 years. Jain said that the company had changed its plans due to the recent economic slowdown. CliniRX to offer minority stake to private equity funds; proceeds to be used for buys in Central and Eastern Europe, source says Date Value Currency Value Sectors Companies Countries Intelligence grade (M) description 27-Nov-09 10 US$ Revenue of Medical: Pharmaceuticals JK Organisation; CliniRX India Strong evidence ClinRXr Research Services Pvt Ltd CliniRX, the India-based clinical research company that is part of diversified company JK Organisation, could seek private equity funding, said a company source. The company would offer a minority stake to the potential investor. CliniRX is looking to acquire clinical research firms in Central and Eastern Europe and would raise the funds to finance acquisitions, he said. The company is seeking targets of between US$5m and US$10m in size, and would seek funding of around US$5m. CliniRX has operations in the US and is now looking to enter Eastern Europe, he said. CliniRX was started three years ago and has revenue close to INR500m (US$10m). JK Organisation, is an India-based conglomerate with interests in tyres, paper, sugar, agriculture and clinical research. It had annual sales of about US$2.6bn, according to a group press release. 3 The Brief: 4 December 2009 | Issue 41 Private Equity Opportunities - Asia-Pacific Greenko will seek private equity investors in six to 12 months, source says Date Value Currency Value Sectors Companies Countries Intelligence grade (M) description 30-Nov-09 50 US$ Minimum Energy Global Environment Fund; India Strong evidence deal size Greenko Group Plc Greenko, an Indian renewable energy firm, will begin stake sale talks with private equity investors in the next six to 12 months, a company source said.