GIC, Baring invest $97m in India’s Marico
Government of Singapore Investment Corp. (GIC) and Baring India Private Equity will purchase a 4.8% stake in Marico, the leading Indian manufacturer of personal care products, for INR5 billion ($97.7 million). The proceeds will partly be used to finance Marico’s acquisition of Paras Pharmaceuticals’ personal care brands.
The company's board has announced an extraordinary general meeting to get shareholder approval for the transaction. It has agreed to issue 22 million shares to Indivest, a subsidiary of GIC, for INR3.75 billion and 7.3 million shares to Baring India Private Equity Fund III for INR1.25 billion. This translates into a price of INR170 per share.
Kotak Mahindra Capital and Citigroup are advising Marico on the deal.
Earlier this year, Marico acquired brands including Setwet, Livon and Zatak from Reckitt Benckiser by demerging Paras' personal care business into a separate company of which it has full ownership. Marico said it would finance the transfer of intellectual property rights, supply agreements and third-party manufacturing agreements relating to Paras through a combination of internal accruals, equity and debt.
Reckitt Benckiser bought Paras Pharmaceuticals in late 2010 for INR32.6 billion and retains the company's healthcare portfolio. The Paras sale generated a 10x return for Actis, which invested about $42 million in the company in 2006, taking a 63% stake. Sequoia Capital came in as a minority investor, with a holding of approximately 7%, while the remainder was controlled by the founder, Girish Patel, and his family.
Baring India expects to fully deploy its $560 million third fund by mid-2013. It recently teamed up with Sequoia to invest INR1.3 billion ($29 million) to increase their existing stake in Manappuram Finance, a non-bank financial company (NBFC) specializing in loans based on gold.
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