BackGoldman Sachs to invest in Amber Enterprises
Goldman to buy 34% stake in the firm, one of India's largest consumer durables OEMs, from existing investor Fairwinds PE, and 14-15% from promoters
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Global investment firm Goldman Sachs Group Inc. is set to invest about ₹ 400 crore in Amber Enterprises Pvt. Ltd, one of the largest original equipment manufacturers (OEMs) of consumer durables in India, according to two people familiar with the development.
Goldman will acquire a 34% stake from existing investor Fairwinds Private Equity (formerly Reliance Equity Advisors) and 14-15% stake from promoters of Amber, said one of the two persons, requesting anonymity.
The equity valuation of Amber stands at about ₹ 800 crore, and the firm has about ₹ 400 crore in debt on its books, said the second person, also declining to be named.
Edelweiss Capital is advising Amber on the sale process.
Spokespersons for Goldman Sachs and Fairwind PE declined to comment. An email sent to Jasbir Singh, managing director at Amber Enterprises on Monday remained unanswered.
Amber manufactures air conditioners, microwaves, components for refrigerators and other consumer durables for companies such as LG Electronics India Pvt. Ltd, Panasonic Corp., Philips India Ltd, Whirlpool of India Ltd, Videocon Industries Ltd, Godrej Industries Ltd, Blue Star Ltd and Voltas Ltd.
“The per capital consumption of India is still low and hence, there is enough room for growth. The companies which are linked with India’s consumption-oriented story will have buyers. The B-to-C (business-to-consumer) supplier firms always attract immediate attention from investors," said S.V. Sukumar, partner and sector head (industrial manufacturing), KPMG India.
Incorporated and promoted in 1992 by Kartar Singh, Amber Enterprises owns nine factories that produce original equipment for some of the biggest brands in India, according to its website.
Global PE funds, such as The Carlyle Group LP, Westbridge Capital Partners LLC and Morgan Stanley Infrastructure Partners LP (MSIP), were engaged in separate talks to acquire a large minority stake in Amber, Mint reported in August last year.
Through this exit, Fairwinds Private Equity will secure more-than-two-times return on its four -year-old investment. Reliance Equity Advisors (now Fairwinds) invested about ₹ 110 crore in two tranches in 2012 and 2013 to acquire a 34% stake in Amber.
Fairwinds PE was launched in 2013 by Ramesh Venkat, former chief executive officer at Reliance Equity Advisors, the PE arm floated by Anil Ambani’s Reliance Group.
The fund was renamed following a management buyout.
At present, Fairwinds Asset Managers Ltd manages Reliance Alternative Investments Fund Private Equity Scheme I, a $200-million fund raised in 2009-10.
Goldman has been active in PE investments in India. Two weeks ago, it invested ₹ 441 crore ($66 million) in PE-owned hospitality firm SAMHI Hotels Pvt. Ltd. In July 2015, it invested in Azure Hospitality Pvt. Ltd, the Delhi-based firm which runs a pan-Asian casual-dining chain under the Mamagoto brand.
In July, Trendsutra Platform Services Pvt. Ltd, which owns the online furniture marketplace Pepperfry, raised $100 million (around ₹ 600 crore) in a Series D funding round led by Goldman Sachs and Zodius Technology Fund.
Besides its interest in the hospitality space, Goldman Sachs has invested in India’s realty sector as well. Through a $150-million deal, it acquired a minority stake in Piramal Realty Pvt. Ltd, the real estate company of Ajay Piramal-led Piramal Enterprises Ltd, in August 2015.
Goldman Sachs also plans to jointly invest $250 million in commercial real-estate assets in India along with realty developer Nitesh Estates Ltd.
While private equity investments in the manufacturing sector have not shown any significant pick-up, there were a few large deals announced last year.
In July 2015, KKR and Co. LP invested $150-million in polyester products maker JBF Industries Ltd.
The acquisition of the consumer electronics business of Crompton Greaves Ltd for $316 million by Advent International Corp. and a unit of Singapore’s Temasek Holdings Pte. Ltd was another such deal.
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