Bain Capitalhas agreed to invest to up $124 million into Himadri Chemicals & Industries Ltd., an Indian maker of coal tar pitch and other carbon products. The deal would give Bain a maximum ownership stake of just over 36 percent. This is Bain’s first investment in India since opening an advisory office in Mumbai in 2008.
Consequent to Board of Directors of Himadri Chemicals and Industries Limited (“Himadri”) approving an issuance of 6.31mm shares to Bain Capital India Investments (“Bain Capital”) on a preferential basis, both parties entered into an agreement for the same at a price of Rs 400 per share (“Issue Price”), resulting in an equity raise of Rs 252 crores (US$ 54mm) (“Preferential Offering”).
The issuance is subject to shareholders’ approval, for which an EGM has been called for on January 29, 2010. Upon issuance of such shares, Bain Capital will own 15.39% of the fully diluted and expanded share capital. Bain Capital will be making a mandatory tender offer for 20% of the expanded equity base in accordance with the takeover regulations, amounting to a further investment of up to Rs 328 crores (US$ 70mm), which together with the Preferential Offering would make this one of the largest Private Equity investments in India over the past year or so.
The issue proceeds will be used to augment the Company’s capacity in current line of businesses as well as to further forward integrate into other value added downstream products including expanding capacity in power generation, besides expansion in China and other global markets.
Commenting on the investment, Mr. Anurag Choudhary, CEO, Himadri, said: “Himadri is today the clear leader in its business segments in India. We welcome Bain Capital into Himadri family, and hope to leverage their investment and value addition expertise, proven with a number of leading global companies, to help take Himadri to a global leadership position.”
Bain Capital’s spokesman said “We are excited about having Himadri as our first investment in India. We are particularly impressed with the quality of visionary leadership provided by the family and the depth of a truly high quality professional management team that ensures high standards of operational excellence. “
UBS Investment Bank and Enam are respectively acting as financial advisors to Himadri and Bain Capital on this transaction. Argus Partners and AZB & Partners are respectively acting as legal advisors to Himadri and Bain Capital. Kirkland & Ellis LLP is acting as international legal counsel to Bain Capital.
Himadri Chemicals (“the Company”) is one of the largest global players in coal-tar pitch & advanced downstream chemical products having critical applications in a number of areas linked to the core sector growth in India including in the manufacture of Aluminum, Steel, Tyres, certain Chemicals, Building Products, and Lithium Batteries. Himadri is reputed for its excellence in the area of carbon competence being amongst the most technologically advanced companies globally in this business. It deploys state-of-the-art manufacturing processes to ensure high quality products, global cost leadership and high standards of environmental compliance. The company counts CVC and IFC as key stakeholders.
About Bain Capital, LLC:
Bain Capital, LLC ( www.baincapital.com) is one of the oldest and largest global private investment firms with more than $60 billion in assets under management. Since its inception in 1984, it has made private equity investments and add-on acquisitions in over 300 companies around the world, including investments in a broad range of companies such as HCA, Dominos, Feixiang Chemicals, NXP Semiconductors, Samsonite, Dunkin Brands, Sigma Kalon, Quintilles, Clear Channel, Warner Music, SunGard, Guitar Center, Dollarama, Warner Chilcott, SunTelephone, D&M Holdings, MEI Conlux, Brentag, Toys “R” Us and Burger King. The firm, headquarted in Boston, has a team of over 300 professionals dedicated to investing in and supporting its portfolio companies. The firm has one of the largest teams in Asia among the leading global private investment firms, with nearly 75 professionals including a large team of dedicated operations professionals supporting its portfolio companies, helping to add value in order to create superior investment returns.