KKR to invest $150m in Indian polyester manufacturer
KKR has agreed to invest $150 million in JBF Industries, an India-based polyester products manufacturer, with a portion of the capital going to the company’s international subsidiaries.
India-listed JBF Industries said in a regulatory filing that it would issue 16.37 million shares to KKR Jupiter Investors for a total consideration of INR4.91 billion ($77 million). This equates to a 20% stake in the company. The private equity firm will also invest in zero-coupon convertible preference shares in JBF Global, a subsidiary of JBF Industries, taking a 14.5% voting right.
JBF's stock was up 2.25% at INR307.50 as of mid-morning trading on August 3. It has gained 17% since the start of the year and is up 125% on a 12-month basis, beating the BSE Sensex Index on both counts.
KKR will primarily make the investment from KKR Special Situations Fund II, a global vehicle that reached a final close of $2 billion in January 2014. It targets distressed and event-driven deals. It is the first investment from special situations fund in India.
JBF's product line includes polyester chips, polyester yarn and films, which are used in the fast-moving consumer goods, textile and packaging industries. It is one of the leading global players in the polyester segment, with six manufacturing facilities - three in India and one in each of Bahrain, Belgium and the United Arab Emirates.
JBF Industries posted revenue of INR89.2 billion for the year ended March 2015, up from INR86.1 billion for the previous 12 months. Net profit rose from INR56.8 million to INR310.9 million over the same period. JBF's long-term borrowings also widened from INR45.6 billion to INR61.7 billion.
"This type of investment into a world-class company such as JBF is a great example of how KKR can support Indian manufacturing companies providing value to global customers," Sanjay Nayar, KKR's India CEO, said in a statement.
The transaction is subject to regulatory and shareholder approvals. Fortune Financial & Equities Services served as financial advisor to JBF Group.
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