Carlyle buys into India's Newgen for a second time
The Carlyle Group has acquired a 54.85% stake in India-based publishing and technical services provider Newgen KnowledgeWorks for $32.8 million via a secondary transaction. This is the second time it has invested in the company.
The exiting investors are Franklin Templeton Private Equity, Aureos South Asia Fund - now managed by The Abraaj Group - and ePlanet Capital. According to AVCJ Research, they bought a 60% interest in Newgen from Carlyle for just over $22 million in 2011.
Carlyle first backed the company in 2004, paying $9.4 million for a 50% stake. The latest investment comes from First Carlyle Ventures III. Based on the size of the deal, it was likely completed by the PE firm's growth team, which is currently investing Carlyle Asia Growth Partners IV, a 2008 vintage vehicle with a corpus of $1.04 billion.
Newgen offers end-to-end publishing and technical services for books and journals, from content creation to marketing. It has production centers in India, the UK and the US, and claims to work with some of the world's largest and most prestigious publishers.
"Newgen has built an extremely successful business with strong franchise value. We were pleased with Carlyle's prior investment in Newgen, and we see the same potential for creating value through our latest investment. We will once again leverage Carlyle's deep industry expertise and global network to support Newgen through our renewed partnership," Shankar Narayanan, managing director at Carlyle India, said in a statement.
He also noted the potential of Newgen's efforts to diversify its business in order to add value. The company has entered financial publishing through UK subsidiary Spectra, offers digital marketing services through ePagemaker, and provides bespoke publishing and documentation solutions via GPSL, another UK subsidiary.
As of September, Carlyle had invested approximately $1.1 billion of equity across 30 transactions in India since 2000. This year the private equity firm has recorded two notable exits in the country, selling its minority interest in Tirumala Milk Products to Groupe Lactalis and exiting the remainder of its stake in Repco Home Finance via an open market transaction.
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