PE continues to be a meaningful source of capital for Indian businesses despite skepticism. Hinduja Group may acquire Houghton International for $1.15 billion. Autodesk acquired Qontext, an enterprise networking firm, to expand its cloud-based services. CX Partners plans to acquire over 70% stake in ATM outsourcing company Transaction Solutions International for 150 crore rupees.

1. PE Round Up Report
CP-Artha Financial Advisory Pvt Ltd. 10/9/2012 Edition: 36
M& A Deal – I

Scepticism around private equity as meaningful source
of capital Hinduja Group may acquire
Houghton International
There has been continued skepticism around private equity (PE) and
Hinduja Group is planning to acquire
its continuity as a meaningful source of capital for businesses and
Houghton International and has
entrepreneurs. This skepticism is not unique to India. PE as an asset
placed a bid of $1.15 Bn
class has come under significant pressure in the Western world as well,
especially post the financial crisis of 2008. Houghton International makes
specialty chemicals, oils and
In the Indian context, the skepticism has largely been around these
lubricants for the metalworking,
three issues — (i) Exit performance (ii) Tax and regulatory issues and
automotive, steel and other
uncertainties and (iii) Slowing economic growth trajectory
industries
However, when one looks at the numbers, they present a very
In 2007, Houghton merged with an
different story. PE has not only emerged as a strong source of capital
affiliate of AEA. Houghton India
for private corporate, but it has also become the first choice for most
operates in India in the name of
of the growing businesses in India.
D.A.Stuart India Pvt. Ltd
The consistent performance of PE during 2011 and 2012, when the IPO Hinduja Group has diversified
market had dried up is indicative of PE as a reliable source of capital. business interests including banking,
Automotives, ITes and others
Indian industry does face challenges ranging from tax and regulatory
matters to a lack of exits and an economic slowdown. However, In Dec 2011, Hinduja Group’s flagship
investors are realizing that a number of these issues are being company – Ashok Leyland Limited
addressed as in GAAR being pushed out and a reduction of capital together with its associates has
gains coming through. acquired additional 49% stake in UK
based bus manufacturer - Optare Plc
Importantly, the Indian economy is still expected to grow at a rate of
as a part of long term strategic
more than 5% with certain sectors such as healthcare, education and
cooperation

2. consumer expected to grow at a much faster pace. This is in contrast to
M& A Deal - II
the dreary situation in Europe and US, where a number of economies
are staring at a recession like situation. Thus India may present a 
Enterprise networking firm
relatively better investment opportunity compared to these developed
Qontext acquired by
economies
Autodesk
Autodesk has acquired the social
networking platform, Qontext,
ATM growth in India has been spiking over the past decade, and the
catering to the corporate segment
total number of ATMs within the country has grown about 30% over the
from Pramati Technologies
past five years to 98000 ATMs currently – with approximately 60,000
deployed by PSU banks alone and rest by private banks. India is The acquisition is aimed at
expected to become one of the biggest markets by 2016 when the ATM expanding the cloud-based services
network of banks is expected to reach 205,000 of Autodesk 360, a cloud platform
enabling store and search facilities
Aavishkaar invests in Electronic payment and services for sharing along with design data
improving services at anytime from
Aavishkaar, rural and semi-urban focused venture fund, invested $4mn
anywhere
in payment solution company Electronic Payment and Services Private
Limited Qontext is a venture of Pramati
Technolgies and operates out of its
EPS Pvt. Ltd. received its first round of funds for the purpose of setting
offices in Mountain View, California
up more than 5500 ATMs in the coming two years in Maharashtra for a
and Hyderabad
PSU bank.
Autodesk is an American leader in
The company at present is into ATM outsourcing and plans to integrate
design, engineering and
all the payment services going forward
entertainment software business. It
It was promoted and founded by Vidya Rani Mani Mamallan and the has a widely used product AutoCAD
website of the company was not available with much information
Global buyout activity in the space
retrievable
include Oracle acquiring Vitrue, a
Aavishkaar is an early stage investment firm with a decade long cloud-based firm that manages
operation record. It follows the investment approach of deploying social media communications for
funds in commercially viable ventures that also have a social impact McDonald’s, American Express and
Gillette, among others for $300 Mn
in May

3. ATM outsourcing segment has been catching the eye of PE players in the past couple of months. Last month
IndoStar Capital was set to invest in Seqouia backed Prizm Payment Services to expand its ATM network
CX Partners to acquire stake in Transaction Solutions
PE firm CX Partners is planning to invest R150 Cr in Transaction Solutions International (India) Private Limited, a
ATM outsourcing and payment company, according to ET. The fund is negotiating to acquire above 70% stake in
the company.
Established in 2005, TSI is in the cash management space and addresses electronic transaction payments. Apart
from ATM management, it also offers services in areas of bill payment and credit cards across its offices in India, the
UK and Australia
Launched in 2009 and led by former Citigroup veteran Ajay Relan, CX Partners manages a corpus of about $515 Mn
(R2,684 Cr)
NVP backed Yebhi to raise more funds
After raising Series C round of R100 Cr from Fidelity Growth partners, Qualcomm Ventures and Catamaran
Ventures – Yebhi.com is planning to raise more funds by 2013 to fund its infrastructure expansion plans. Company
has acquired jewellery e-tailer Stylishyou.in for about $1-1.5Mn in a cash cum stock deal, this year may 2012
Yebhi was launched in 2009 by Manmohan Agarwal. It offers products in various categories including shoes,
apparel, bags, mobiles, cameras, eyewear, watches, home furnishing, lingerie and fragrances. It operates a hybrid
online and offline wholesale cash and carry business through bigshoebazaar.net, and an e-commerce website,
Yebhi.com (previously known as known as bigshoebazaar.com)
Last July, the company raised Series B round of Rs.40 Cr from Catamaran Ventures (R26Cr) and Nexus Ventures
Partners (14Cr), by diluting 20% stake
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Private Equity (PE) Research team
CP-Artha Financial Advisory Pvt Ltd.
No 34 B, East Club Road, Shenoy Nagar, Chennai -600030, India