The FMCG deal counter has been ringing incessantly this year on the back of a surge in private equity (PE) transactions. Data by audit, tax and advisory firm Grant Thornton shows that the number of PE deals in the first nine months of 2012 stood at 11 in comparison to 7 during the same time last year. The number of PE deals in 2010 was four.
Value-wise, the 11 deals this year were worth $337.96 million as against $71.30 million last year and $210.64 million two years ago.
M&A transactions, in contrast, have fallen, touching 12 this year versus 17 and 26 respectively in 2011 and 2010.
Raja Lahiri, partner, Transaction Advisory Services, Grant Thornton, says the trend of more PE deals is likely to continue going forward. "There is need for more expansion capital in FMCG as companies both big and small are looking to grow on the back of the spurt in consumption. This makes it attractive for PE players to step in. Which is why PE deals are likely to be more than M&A deals," he says.
Some of the key PE deals that happened this year included Godrej Consumer's nearly 5 per cent stake sale to Singapore-headquartered private equity player Temasek for Rs 685 crore. The other one was Marico's 4.8 per cent stake sale to Baring and GIC for Rs 500 crore.
