 "Blackstone exits Agile Electric with 2x gain in less than 2 years")
The transaction comes about 18 months after Blackstone along with partners and high net worth Indians paid $110 million to acquire the stake from various shareholders of Agile Electric Sub Assembly in July 2013.
The exit gives a healthy gain of 2x for Blackstone, as it had come in with around $52 million during July 2013.
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Agile Electric Sub-Assembly owns 60 per cent in publicly-held Igarashi Motors in India and with Igarashi Japan acquiring indirect control over its listed entity in India, an open offer will be triggered. Agile Electric is the largest manufacturer of DC motors in the country and its customers include leading companies such as Delphi, Bosch, Ford and Continental. The company has eight manufacturing facilities in Chennai, seven of which are located within special economic zones.
According to information available, the offer price would be Rs307-308 a share of Igarashi Motors. The entire size of the open offer will be $41 million and Religare Capital Markets has been appointed the manager to the open offer. Igarashi Motors' stock gained 0.84 per cent on Thursday and closed at Rs348.05 a share.
When Blackstone took control over Agile Electric, and subsequently landing control of Igarashi India, in July 2013 through a two-tiered transaction, it triggered an open offer for acquiring 7.9 million shares at the then share price of Rs65 each.
According to a PwC report, PE investments in India stood at $11.492 billion (excluding real estate deals) across 459 deals. In 2013, PE investments stood at $9.78 billion with 469 deals.
Going forward, "the outlook for PE in 2015 is positive. In part, this could be attributed to the anticipated higher levels of growth owing to the economic reforms on the anvil, it is in part also attributed to the exit activity from the funds of 2006-08 vintage," PwC said.
Anticipated higher growth rates and a lower interest rate regime are likely to create investment opportunities in the consumer sector, it added.
"Private equity investors are also going to be watching the impact of key reforms such as the introduction of the goods and services tax regime. That said, there are some concerns about the ability of the government to speed up reforms, and this would be key to the activity levels in 2015," the PwC report noted.
- 97.9% Stake that Igarashi Electrical Works and Bengaluru-based Mape Advisory Group will acquire in Agile Electric Sub-Assembly
- $110 million Amount for which Blackstone along with partners and high net worth Indians acquired stake in Agile Electric Sub Assembly in July 2013
- 60% Stake that Agile Electric Sub-Assembly owns in publicly-held Igarashi Motors in India
- $41 million Entire size of the open offer