New Silk Route closes in on India restaurant deal
New Silk Route Advisors expects to close its first investment in an Indian restaurant business later this month, having spent two years looking for suitable targets. The private equity firm has committed $100 million in debt and equity and plans to spend $180-200 million in the country over the next 12 months, the Wall Street Journal reported.
New Silk Route wants to convert the company into a holding vehicle for a number of food businesses. Jacob Kurian, a partner New Silk Route, compared the structure to that of Yum Brands, which owns KFC, Pizza Hut and Taco Bell - different cuisines and different brands, but with a common focus on fast food. He declined to name the target company, saying only that it serves Indian dishes.
New Silk Route has placed an advertisement on its website for a CFO for the company; the ad notes that experience in mergers and acquisitions would be an advantage. Kurian added that the principal challenge in India's restaurant industry lies in consolidation, creating a high-quality restaurant and then replicate it across 200 outlets.
The private equity firm runs a $1.4 billion Asia fund, which was in 2006 and is now nearly 60% deployed. India is the fund's primary focus, and it recently closed an investment in Sri Chaitanya Educational Group. It is lining up deals involving a logistics company, a medical-device manufacturer and a telecom firm.
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