
Sequoia, Baring in talks to sell Coastal Projects
India’s Coastal Projects, which is backed by Sequoia Capital and Baring Private Equity Asia among others, is reportedly in talks with German firm Hochtief about a possible sale of the business.
Fidelity Investment Management and Deutsche Bank are the other investors negotiating to sell a majority stake in the Hyderabad-based construction services firm to the German conglomerate, which owns the likes of Leighton Group in Australia.
The deal could reach an enterprise value in excess of $500 million, and should certainly raise more than $300 million, according to three sources cited by The Times of India. Edelweiss Capital is thought to be managing the sales process.
Sequoia, Baring, Fidelity and Deutsche Bank hold a combined 35% stake in Coastal Projects, while the founders and a New Delhi-based corporation own the remainder. Baring joined the capital structure in December 2009 when it bought an exiting shareholder's stake for an estimated $50-60 million. Sequoia and Fidelity also enlarged their stakes at this time, though Deutsche Bank and another existing investor, CVC International, did not participate in the round.
Coastal Projects operates across sectors including wind, thermal power, roads, hydroelectric power and dams, as well as tunneling and mining. The company's net profit is believed to be in the realms of INR1.5 billion ($28.4 million) on an annual turnover of INR18 billion. Last year, it paid INR1.08 billion for a 26% stake in Italian tunnel engineering business SELI.
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