The promoters of Bangalore-headquartered Manipal Global are closing in on a deal to buy back their early private equity investors – Capital International and IDFC Private Equity in a $120 million deal. The promoters – led by Ramdas Pai and his son Ranjan Pai, are understood to be in advanced discussions with a couple of banks to raise debt for this buyback.
Ranjan Pai, MD & CEO, Manipal Education & Medical Group confirmed to Business Standard that they are in advanced discussions with banks and hopefully they should be closing the deal. During 2005-06, Capital International and IDFC Private Equity had invested $70 million in Manipal Global for a 12 per cent stake. IDFC Private Equity had during last year made a partial exit and during this round, IDFC along with Capital will get a complete exit. In addition to these two investors, Manipal Global had also raised Rs 200 crore each from Premji Invests and Catamaran Ventures, owned by Infosys co-founder Narayana Murthy, who will eventually hold around 7 per cent each in the company.
The promoters of Manipal Global are resorting to raising debt and dipping into their pool of resources after a move to rope in a strategic partner did not sail through due to various issues. “The promoters have other business such as the flourishing healthcare arm and other business interest based on which they will be raising debt to fund this transaction,” two investment bankers in the know told Business Standard. During last quarter, the Manipal Healthcare had raised Rs 500 crore from India Value Fund Advisors, and has an option to raise a further Rs 500 crore from them within end of March on the same valuation.
Manipal Global had revenues of around Rs 1,200 crore during last fiscal and had an operating margin of about 30 per cent, while its debt is Rs 500 crore, which is also being refinanced with a couple of global financial institutions. The company has campuses in Antigua, Dubai, Malaysia and Nepal, besides the Sikkim Manipal University in India and a slew of 30 institutions that focus on executive and vocational development. It is understood Manipal Global may consider the private equity route for its planned expansion in Sri Lanka and Africa.
In addition to these streams of revenue, Manipal Global Education Services has made strategic investments in emerging companies, including MeritTrac, a pan-India skills assessment and testing company, and U21 Global, a global online graduate school. Manipal Education has also joined hands with City & Guilds to offer a skills training programme called IndiaSkills. On its investment in TutorVista, Manipal Global recorded a blockbuster exit, when Pearson acquired the majority stake in two steps, paying about Rs 650 crore for a stake of 76 per cent in the company.