Sequoia exits Cafe Coffee Day stake in founder buy-back
Sequoia Capital India has sold its stake in Amalgamated Bean Coffee Trading, the unit of India’s Coffee Day Group that runs the flagship retail chain, Café Coffee Day.
It was reported in June that Sequoia was targeting returns of 16-18% on its $20 million investment, made in two $10 million tranches in 2006 and 2007, respectively. Meanwhile, sources told LiveMint that the IRR would be in the 18-20% range. This implies a money multiple of around 2.8x and an approximate transaction size of $56 million.
As anticipated by the media since May, Coffee Day's owner, V.G. Siddhartha, has upped his shareholding in Amalgamated Bean by Sequoia's stake. Earlier this year, Siddhartha secured INR1.25 billion ($23 million) in debt to finance the transaction. This is thought to have taken the form of INR1 billion of non-convertible debentures and INR250 million in loans.
The Bangalore-based unit's other investors include Darby Private Equity, International Finance Corporation (IFC) and Deutsche Group, which each became involved between 2006 and 2008.
Amalgamated Bean generated an EBITDA of INR161 million on revenues of INR9.4 billion in 2011 fiscal year.
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