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BW Businessworld

Cashing Out

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Parting Gift
Network18 promoter and founder Raghav Bahl and his associates walked away with Rs 1,055 crore for their residue shareholding after the Mukesh Ambani-promoted Indian Media Trust (IMT) announced on 29 May this year that it was converting optional convertible debentures held by it to take a controlling stake of 78 per cent in Network18 and 9 per cent in TV18. The takeover process started back in January 2012 when Reliance Industries set up a trust to advance money to Bahl to finance a rights issue to bring cash into the company and to buy out the Ambani-controlled ETV broadcasting network.

G.M. Rao Checks Out...
The GMR Group and its promoter G.M. Rao raised $350 million (approx Rs 2,000 crore) after  they sold GMR’s entire 40 per cent stake in Istanbul’s Sabiha Gokcen airport in December 2013 to Malaysia Airports Holdings. Malaysia Airports, which already held a 20 per cent stake in the airport, Turkish firm Limak, which owned 40 per cent, and GMR acquired the operating rights to the airport for 20 years for $2.6 billion in 2007. Malaysia Airports had the right of first refusal for the GMR stake.
 
G.M. Rao
Booster Shot
Strides Arcolab, promoted by chairman and MD Arun Kumar, signed a deal in February 2013 to sell its Agila unit to the US-based Mylan Inc for $1.6 billion (about Rs 10,000 crore). Through the deal, the US firm acquired Agila Specialties, the Australian injectible medicine business of Strides. Kumar, who owns a 28 per cent stake in Strides, is believed to have made about Rs 1,400 crore as dividend.

No Longer Little
Facebook acquired Bangalore-based Little Eye Labs in its first acquisition in India. The startup was promoted by  four programme analysts — Giridhar Murthy, Kumar Rangarajan, Satyam Kandula and Lakshman Kakkirala. Though the consideration paid was not revealed, it is believed to be in the range of $15 million (around Rs 90 crore). The Little Eye Labs team will move to Facebook’s headquarters in Menlo Park, California, where it will leverage the behemoth’s infrastructure to improve its apps.

In Apple’s Orbit
Vipul Ved Prakash and Rishab Aiyer Ghosh made waves when Apple announced it was acquiring the duo’s social search and analytics firm, Topsy Labs, for $200 million (around Rs 1,200 crore). The two techies launched Topsy in 2006 in San Francisco and gained momentum as a certified partner of Twitter, maintaining a comprehensive index of tweets. Topsy makes products to search, analyse and draw insights from conversations and trends on social websites.

…And Gains Rs 2,900 cr From Singapore Project Exit
Earlier, in March 2013, GMR announced its exit and the sale of its entire 70 per cent stake in Singapore’s Island Power Project. This and the Istanbul sale were part of the group’s strategy to reduce debt, of over Rs 30,000 crore. GMR signed a share purchase agreement with FPM Power Holdings to sell its controlling interest in the 800 megawatt gas-based plant for an equity value of S$660 million (Rs 2,923 crore).

Engineering Success
In September 2013, Emerson bought Pune-based Virgo Valves and Controls for $450 million (around Rs 2,700 crore). Mahesh Desai and his partner Balasubramanian Desai, both former engineers from Larsen & Toubro, built the company from scratch and owned four factories in India, the US, Italy and Germany. It supplies products to oil and gas, power and mining companies in 72 countries.

Logging Out In Style
When Baring Private Equity Asia in August 2013 paid as much as Rs 1,687 crore to buy a controlling stake in Hexaware Technologies, its founder chairman Atul Nishar  walked away with a cheque of Rs 1,000 crore for his  27.7 per cent stake in the company. Baring also acquired 14.1 per cent from GA Global, an affiliate of private equity firm General Atlantic. The Hexaware transaction is one of the largest the IT sector has seen in recent years. Nishar founded Hexaware Technologies in 1990 and was the driving force behind its strategic and marketing focus.
 
Ajay Piramal
Dialling A Profit
Ajay Piramal, chairman of Piramal Enterprises, got Rs 8,900 crore for his 11 per cent stake in Vodafone. Piramal Enterprises acquired its holding in two tranches in August 2011 and February 2012 for Rs 5,856 crore. It, therefore, exited at a profit of Rs 3,044  crore or 52 per cent over its initial investment. Piramal had acquired the Vodafone stake as a short term, strategic investment, using the proceeds of the  Rs 16,000 crore that came in from the sale of Piramal Enterprises’ formulations division to Abbott in 2010.

Transfer Of Power
Toshiba Corporation bought out Vijai Electricals, a leader in manufacturing power and distribution transformers, in September 2013, making its promoter, Dasari Jai Ramesh, $200 million (approx Rs 1,200 crore) richer. The acquisition of the company was completed in November 2013. The Hyderabad-based company was floated in 1973 to manufacture and sell electricity distribution transformers. Vijai further expanded its business in 2006, when it entered the power transformer and switchgear businesses.

The Turakhias Strike It Rich
Divyank and Bhavin Turakhia (in pic) took a loan of $600 from their parents in 1998 to help finance the online services they were launching. By September 2013, US-based Endurance International announced it was buying out their company, Directi Web Technology. The exact consideration for the deal was never announced, but it is believed it fetched the brothers close to $110 million (approx Rs 670 crore).

(This story was published in BW | Businessworld Issue Dated 14-07-2014)
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