NewQuest, Kotak invest in Paragon portfolio companies
NewQuest Capital Partners has joined a $21 million investment in construction firm Capacit’e Infraprojects and engineering components manufacturer Maini Precision Products, both of which are portfolio companies of India-based GP Paragon Partners.
The private equity firm is acquiring shares from existing investors - whose identities have not been disclosed - in keeping with its direct secondary strategy. Its partner in the deal is Infina Finance Private, an investment firm owned by Kotak Mahindra Bank and the Kotak family. As an LP in Paragon Partners Growth Fund I, Infina is effectively increasing its overall exposure to the two companies.
Located in Mumbai and founded three years ago, Capacit'e is involved in engineering, procurement and construction for leading real estate developers, corporates and institutions. It generated INR10 billion in topline revenue for the 2016 financial year, backed by a gross order book of INR54 billion. Paragon invested $10 million in the business in August 2015, taking a significant minority stake.
Maini is based in Bengaluru and produces high-precision engineering components and assemblies for the global automotive, industrial and aerospace sectors. The company was founded in 1973 and counts Eaton, Magneti Marelli, Volvo, Snecma, GE and Marshall among its clients. Paragon and its co-investors committed $17 million to the company in August of this year, acquiring primary and secondary shares.
"We were impressed by the management teams of both the companies. They have built great businesses with a focus on quality that has made them reliable and preferred partners of their clients," Amit Gupta, partner and COO at NewQuest, said in a statement.
Paragon Partners was founded last year and reached a first close of $50 million on Paragon Partners Growth Fund I in March. The overall target is $200 million. The firm seeks to make growth capital investments in mid-market companies in the consumer, financial services, infrastructure, industrials and healthcare sectors. Its average check size is $10-20 million.
NewQuest is investing its third fund, which closed at the hard cap of $540 million in June after less than 10 months in the market. It direct buys stakes in businesses from existing investors that might be seeking to change strategy, leave a particular market or return capital to LPs in order to support a new fundraising process. They may also be under end-of-fund-life pressure and willing to offload un-exited assets in order to liquidate a fund.
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