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Warburg Pincus finalizes $125m Future Capital deal

  • Susannah Birkwood
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Warburg Pincus has reportedly agreed to buy a majority stake in India's Future Capital Holdings (FCH), the financial services unit of the Future Group, for $100-125 million.

The US private equity firm, which joined the race to acquire shares in the firm last month, will pay INR165-170 per share - an 18-24% premium to its closing price of INR138 on Friday. It will in turn snap up the 56% stake held by Kishore Biyani-controlled Future Group, which had been considering its exit options for the past two years.

Law firm AZB & Partners was mandated to conduct the second phase of due diligence on FCH.

The company's board is scheduled to meet on Monday to approve the transaction.

Warburg's main competitor through the process appeared to be Hyderabad-based Deccan Chronicle Holdings, which previously tried to acquire the asset but failed due to a lack of funds.

Last November, the Blackstone Group and Bain Capital were both identified as potential acquirers of the company, having entered into discussions at the time about the price of a potential deal and whether to involve both funds or just one. And last August, KKR was thought to be in the running, while Baring India and CX Partners have also been cited in connection with the sales process.

Morgan Stanley initialized the auction for the stake last year, but this was taken over by the promoter of a Mumbai-based investment bank in March.

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