October 28th, 2023
MergerDomo’s weekly Newsletter brings you the latest on M&As, JVs, Investments and noteworthy partnerships that are shaping the future of businesses in India.
This week's M&A highlights in India feature significant deals, such as Shyam Metalics' INR 351 Crore acquisition of Mittal Corp, KP Advisory Services' INR 185 Crore deal for Radisson Blu, and Adani Power's INR 3,440 Crore acquisition of Coastal Energen. Torrent Pharma's USD 7 Billion bid for Cipla's stake faces valuation challenges, while Alta Capital acquires USD 320 Million stake in Good Host Spaces. Shipsy's acquisition of Stockone enhances logistics solutions, and the Reliance-Disney deal encounters a USD 7 Billion valuation hurdle.
Shyam Metalics and Energy Limited (SMEL) acquires Mittal Corp Limited in a INR 351 crore deal, establishing two manufacturing facilities in Madhya Pradesh: Unit I for stainless steel and mild steel billets and Unit II for wire rods and bars. SMEL, led by Vice Chairman Brij Bhushan Agarwal, focuses on operational excellence and reducing stainless scrap dependence with a stainless flat steel facility in Odisha, targeting 80% backward integration. SMEL's diversification plan involves a INR 7500 crore investment over five years, aiming for INR 10,000 crore Capex and creating 10,000 jobs alongside the existing 15,000 employees. The acquisition received approval from an Indian bankruptcy court, ensuring a 20% creditor recovery. This move signifies SMEL's substantial expansion in the metal industry.
Read more lessKP Advisory Services, the family office of Gland Pharma's former promoter, Ravi Penmetsa, has acquired GBJ Hotels, the operator of the luxurious Radisson Blu in Coimbatore, through the corporate insolvency process. Lenders unanimously endorsed KP Advisory Services' INR 185-crore proposal, despite claims totaling INR 196 crore. This acquisition marks a remarkable 94% recovery for creditors. Indian Overseas Bank, the primary financial creditor, successfully reclaimed its entire INR 115.4 crore claim under the approved resolution plan. The deal showcases a strategic move by a family office within the M&A landscape, securing a prized asset in the hospitality sector.
Read more lessIn a high-stakes bidding showdown, Adani Power is on the cusp of acquiring Coastal Energen, a financially distressed power company, in a INR 3,440 crore deal. After two days of fierce competition, Adani Power emerged as the victorious bidder, with Jindal Power exiting the race. Coastal Energen, an operating power plant available for purchase, drew substantial attention amid its corporate insolvency proceedings. Adani Power's bid is in collaboration with Dickey Alternative Investment Trust. The resolution professional overseeing the process received multiple strong proposals, ultimately resulting in a significant 35% recovery for creditors. Coastal Energen's strategic assets include operational 600 MW units and a long-term power purchase agreement.
Read more lessTorrent Pharmaceuticals' ambitious bid to acquire a significant stake in Cipla, a Mumbai-listed drugmaker, valued at around USD 7 billion, has been temporarily halted due to disparities in valuation. Talks between Torrent and the Hamied family, the stakeholders of Cipla, have been put on hold, although they may resume if an agreeable valuation is reached. The surge in Cipla's shares, up 19% since reports of the stake sale surfaced, has created a bid-ask gap of 15-20%. Torrent may potentially partner with private equity funds to pursue the USD 3.9 billion stake, should valuations align in the future. This development has implications for India's pharmaceutical landscape.
Read more lessQuality Care India Limited (QCIL), a hospital platform co-owned by Blackstone and TPG Growth, is set to acquire KIMS Health Management (KHML), a prominent hospital chain in Kerala, for INR 3,300 crore (USD 400 million). The deal grants QCIL an 80-85% stake in KIMS, positioning it as India's fourth-largest hospital group with nearly 3,800 beds. KIMS' founder, Dr. MI Sahadulla, retains a 15-20% stake and continues to lead the hospital business. Blackstone's entry into the KIMS acquisition, initially valued at INR 4,000 crore, strengthens QCIL's position in India's healthcare sector.
Read more lessIn the largest-ever student housing transaction in India, real estate investment firm Alta Capital has acquired Goldman Sachs' and Warburg Pincus' 100% stake in Good Host Spaces, a leading student housing platform, for USD 320 million. This deal marks the complete exit of both Goldman Sachs and Warburg Pincus. Good Host Spaces operates purpose-built, on-campus student housing assets partnering with universities, with an operational portfolio of approximately 25,000 beds across five cities. The acquisition indicates global investors' continued interest in Indian real estate, especially emerging segments like student housing.
Read more lessSaaS logistics platform, Shipsy, has acquired Stockone, a cloud-based Warehouse Management System (WMS) and inventory management provider, bolstering its product portfolio. Shipsy's extended offerings will empower enterprises to optimize logistics, enhance customer experiences, and streamline operations within a comprehensive logistics technology platform. The acquisition aligns with Shipsy's vision of providing end-to-end logistics management solutions, marking a strategic expansion for the logistics software firm. With over 220 enterprise clients and impressive shipment and container tracking capabilities, Shipsy aims to offer a holistic logistics solution for businesses across the supply chain.
Read more lessReliance Industries (RIL) and The Walt Disney Company's negotiations for Disney's India operations have hit a snag due to a substantial valuation gap. RIL values Disney Star at USD 3-4 billion, while Disney aims for a USD 10 billion valuation. Disney Star encompasses TV and digital assets, including the Disney+ Hotstar platform and 70 sports and entertainment channels. Disney's sports business in India reported an operating loss of USD 444 million, and Disney+ Hotstar lost 21 million subscribers after losing IPL digital rights. The challenge lies in servicing these sports losses, making RIL more interested in Disney Star's entertainment business.
Read more lessJSW Infrastructure is in discussions to acquire Gopalpur Ports, the ports arm of Shapoorji Pallonji (SP), at an estimated enterprise value of INR 3,000 crore, including debt. The divestment is part of the Mistry family's commitments to lenders in loan covenants, with SP Group committed to divesting the unit by March 31 next year. JSW Infrastructure views Gopalpur Ports as a strategic addition to complement its steel-making operations. Gopalpur Ports specializes in handling iron ore cargo, a vital raw material in JSW's steel business, which could enhance JSW's ports portfolio by about 25 million tonnes per annum.
Read more lessVedanta Group's Sterlite Power Transmission Limited and Singapore's sovereign wealth fund, GIC, have partnered to establish a USD 1 billion joint venture platform, targeting India's escalating demand for power evacuation networks amid the renewable energy surge. Sterlite Power, under billionaire Anil Agarwal's control, boasts an extensive 34,000+ km optical ground wire-based communication network across 15 states, in addition to manufacturing power cables and conductors. GIC is poised to invest USD 500 million in the infrastructure business for a 49% stake, with a further USD 400 million to be deployed in tranches over the next two to three years linked to Sterlite Power's transmission project successes and planned capital expenditures. This collaboration positions GIC as Sterlite's exclusive transmission partner in India.
Read more lessIn a significant development, Rajiv Rattan, a co-founder of Indiabulls, has successfully resolved a longstanding dispute with his joint venture partner, Lone Star Funds, by acquiring their 50% stake in RattanIndia Finance for INR 611 crore (about USD 73 million) in an all-cash transaction. This resolution puts an end to a contentious legal battle and reflects Rajiv Rattan's commitment to take full control of the non-bank finance company.
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