India April 9 Weekly Newsletter 2012 This document covers news related to India with a special focus on areas like mergers & acquisitions, private equity & venture capital. Volume 128, April 9th, 2012 For the period April 2, 2012 to April 8, 2012 April 9, 2012 [INDIA WEEKLY NEWSLETTER] Highlights CIMB Group To Acquire RBS' Wholesale Banking Business In India…(3) PGC Textile To Complete Buyout Of Swiss Content Pages Apparel Firm Switcher For $30 mn…(3) DMI Finance Acquires 16% In Alchemist Mergers & Acquisitions News 3-4 ARC…(4) Mergers & Acquisitions Deals 4-8 Gerresheimer AG Acquires Gujarat-based Neutral Glass & Allied Industries…(5) Private Equity News 8-9 Cytec Industries Acquires Star Orechem's Private Equity Deals 9-10 Manufacturing Assets For $37 mn…(6) Bajaj Auto Acquires Additional 6.3% In KTM Venture Capital News 11-11 Power Sports…(7) Venture Capital Deals 11-12 Marico To Raise $100 mn PE Funding…(8) India Agri Business Fund Invests Rs50 cr In Super Agri Seeds…(9) Advent International Invests $105 mn in CARE Hospitals…(10) Snapdeal Acquires Sport Goods Etailer - esportsbuy.com…(10) Hospitality SaaS Solutions Firm Gets $1.2 mn From Accel Partners, Others…(11) Confidential LKP Securities Limited 2 April 9, 2012 [INDIA WEEKLY NEWSLETTER] Mergers & Acquisitions News ABP May Buyout Star News' Stake In JV ABP Private Limited is planning to buy out Star Group Limited’s stake in news television JV- Media Content and Communications Services India Private Limited. Formed in 2003, MCCS is a 74:26 JV between ABP TV and STAR News Broadcasting. MCCS broadcasts three 24- hour news channels, STAR News in Hindi, STAR Ananda in Bengali and STAR Majha in Marathi. There have been issues between partners. ABP went ahead and independently launched a general entertainment channel, Sananda TV, to take on the popular STAR Jalsa in the Bangla GEC space. TAR India entered into an ad sales alliance with rival broadcaster NDTV for its three news channels. Kolkata based ABP Pvt. Ltd. runs Bengali newspaper - Anadabazar Patrika (Newspaper), Unish-Kuri (19-20) magazine, Anandalok magazine and other. CIMB Group To Acquire RBS' Wholesale Banking Business In India CIMB Group has entered into an agreement with Royal Bank of Scotland to wholesale banking businesses in India and in 10 other Asia-Pacific markets for around 75 mn pounds ($ 120 mn). RBS will sell its cash equities, equity capital markets and M&A businesses in India as part of the transaction. The principal benefit of RBS in the sale is to mitigate partially the shutdown costs otherwise associated with these businesses. RBS will continue its debt financing, risk management and transaction services operations in 11 countries where it currently operates. The bank will sell its cash equities business to CIMB in India, Australia (excluding the interest in RBS Morgan), China, Hong Kong and Taiwan, including the cash equities sales desks in the US and UK. It’ll also sell the equity capital markets, and M&As businesses in India, Australia, China (excluding activities carried out by Hua Ying Securities), Hong Kong, Indonesia, Malaysia, Singapore, Taiwan and Thailand. RBS in January announced a plan to exit the wholesale banking businesses (cash equities, corporate brokering, equity capital markets and M&A) and cut jobs after receiving the world’s biggest banking bailout during the global financial crisis. PGC Textile To Complete Buyout Of Swiss Apparel Firm Switcher For $30 mn Tirupur-based PGC Textiles Ltd is buying out the 14% stake it does not own in the Swiss apparel firm Switcher, which it would do in the next 2 months. Switcher also happens to be the country’s largest lingerie manufacturer. The Switcher Group has more than 1,150 corporate clients in Switzerland and Europe, and owns 360 stores, corners and centres in Switzerland. Started in 1987, PGC has been manufacturing for Switcher for the last 20 years. However, over the past two years, it had acquired controlling stake in Switcher from a financial investor and the promoters to increase its holding to 86%. PGC has introduced Switcher in the US market last year and is planning to launch the Switcher brand of innerwear in India in the next few months. PGC has more than 3,000 point of sales and Confidential LKP Securities Limited 3 April 9, 2012 [INDIA WEEKLY NEWSLETTER] control over the entire supply chain – starting from raw cotton to its retail sale stage. It has also launched its own brands a few years ago, which are now retailed in India, Belgium and America. Reliance, Arisaig Partners May Exit Gini & Jony Reliance Capital and Arisaig Partners are planning to exit from their investment in Gini & Jony Limited, while Lakhani Family is planning to part exit. Reliance Capital holds 22% stake in Gini & Jony, while Singapore-based fund Arisaig Partners has a 9% share in the retail chain. The remaining shares are held by the Lakhani family, which is looking to raise funds but will not exit the company which has a turnover of about Rs300 cr. Last month company filed for CDR with bankers including Punjab National Bank, State Bank of India, Bank of India and IDBI. Gini & Jony plans to restructure term loan worth Rs20 cr that was due for repayment last December. Founded by the Lakhani family, Mumbai based Gini & Jony Limited engages in the manufacture and sale of apparel for kids and young adults in India. It markets its products through franchisees, retail shops, factory outlets, and multi-brand outlets. Gini & Jony is currently present in 79 cities with 277 exclusive brand outlets, 240 large format stores including Shoppers Stop, Lifestyle, Pantaloons, Globus, Reliance Trends and Reliance Footprints. It is also present in 512 multi-brand stores. Tyroo Backs Management Buyout Of Affiliate Ad Network DGM India Ad network Tyroo Media Pvt Ltd has joined hands with Anurag Gupta for a management buyout of affiliate ad network DGM India for Rs3.35 crore ($0.66 million) from Asia Digital Holdings (ADH). Of the total deal amount, Rs2.36 crore will be paid as the first tranche. ADH is an AIM-listed firm while Gupta is the managing director of DGM India. Gupta is picking the stake for Rs81 lakh through the entity Inflection Digital Holdings Pvt Ltd, which will own 32.79% stake. Tyroo, a Gurgaon-based ad network, is picking 61.76% for Rs1.54 crore. In addition, ADH will seek to procure the sale of the remaining 5.44% stake for the acquirers, which may be held by other employees of the firm or owned by some other minority stakeholder. DGM India delivers leads and sales for advertisers. Its delivery channels include an affiliate network and search engine marketing. In an affiliate channel participant website, owners are paid on results delivered for advertisers from digital promotion of the advertisers' offering, which typically entails consumers actually buying products and services. Results are tracked by DGM India's technology environment and account management teams that service both advertisers and participating web site owners. Mergers & Acquisitions Deals DMI Finance Acquires 16% In Alchemist ARC DMI Finance has acquired 16% stake in Alchemist Asset Reconstruction Company. Alchemist ARC is in the business since 2002. It claims to have over 100 years of cumulative experience in the banking domain across international and domestic banks such as Confidential LKP Securities Limited 4 April 9, 2012 [INDIA WEEKLY NEWSLETTER] Citigroup, SBI, ICICI, Dhanalaxmi, and Bank of Tokyo- Mitsubishi. DMI Finance was founded in 2009 by former Citigroup employees Shivashish Chatterjee and Yuvraj C Singh. DMI Finance has a corpus of about Rs500 cr, of which it has deployed over Rs400 cr. Currently it is in talks with both foreign and domestic investors to raise another Rs500 cr over the next 12-14 months. Besides corporate lending, its core business area, DMI Finance is also involved in securitization and distribution of fixed income product, distressed asset financing and retail lending. In September 2011, DMI Finance invested Rs30 cr in Svenska Design Hotels for setting up small format luxury hotels in Tier 2 & 3 cities. Kajaria Ceramics Acquires 51% In Vennar Ceramics Kajaria Ceramics Limited has acquired 51% stake in Hyderabad based Vennar Ceramics Limited for Ra13.65 cr. Kajaria will subscribe to fresh equity share capital of Vennar and upon acquisition of shares and completion of other formalities, Vennar Ceramics will become the subsidiary of the company. Vennar is setting up a new plant which would start commercial production in June 2012. This will help Kajaria to cater to the southern markets from this plant enabling the company to reduce the transit time for the delivery of goods and savings in transportation cost. Vennar Ceramics Limited is a subsidiary of Anjani Cement Limited Group, which has interest in Cement, Building Products, Security Printing, Foods & Retailing. Vennar is an advanced stage of setting up a plant to manufacture 2.30 mn sq. meters pa of high end ceramic wall tiles, the addition of which would take the total annual capacity of the company to 38.30 mn sq. meters (including 10 mn capacity of subsidiaries). New-Delhi based Kajaria Ceramics is a tile manufacturer and has a distribution network of about 600 dealers and over 6000 sub-dealers spread all over India. It has annual capacity of 36 mn sq mt distributed across four plants – Sikanderabad in UP, Gailpur in Rajasthan and two in Gujarat. Vennar will be the fifth plant and with this acquisition the total annual aggregate capacity of Kajaria would become 38.30 mn sq ft. Gerresheimer AG Acquires Gujarat-based Neutral Glass & Allied Industries Germany based Gerresheimer AG has agreed to acquire a 70% stake in Gujarat-based Neutral Glass & Allied Industries.