The merger & acquisition (M&A) deal counters are buzzing with some significant deals brewing in the investment banking and internet space. Separate media reports said buyout major KKR is eyeing home-grown investment banking firm Avendus while Alibaba Group-backed digital payment solutions and e-commerce venture Paytm is eyeing Jabong, one of the top two fashion e-tailers in the country.
Here's a round-up of the deals reportedly in the works:
KKR-Avendus
KKR is set to acquire a majority stake in Avendus Capital for around $100 million, The Economic Times reported citing sources.
It said the deal would be through a mix of issue of new shares and a share sale by existing shareholders while Avendus’ founders will continue to run the show.
The founding promoters Ranu Vohra, Gaurav Deepak and Kaushal Aggarwal together with their leadership team own a majority in the financial services firm currently.
Eastgate, which invested in the firm in 2008 picking over 26 per cent stake, is likely to be exit through this deal, the report added.
Mumbai-headquartered Avendus Capital is one of the top mid-market investment bankers in the country and also has a separate alternative asset management unit. It has been especially active in advising on internet-related funding and M&A deals in the country. It has also been looking to start a separate NBFC.
Recently, it appointed Deepak Bhandari to head its European subsidiary Avendus Capital (UK) Pvt Ltd.
If it goes through, this will be the second significant deal in pure investment banking space after 2011 when Enam was acquired by Axis Bank.
When contacted by VCCircle, spokespersons of Avendus and KKR declined to comment.
KKR has been an active investor in India through both its PE and credit or lending portfolio business. Early this year, the PE giant made a debut exit from its Indian portfolio by selling its entire stake in Bharti Airtel’s telecom tower arm Bharti Infratel Ltd.
Paytm-Jabong
In an another deal, mobile commerce and virtual wallet property Paytm, which is run by Noida-headquartered mobile internet firm One97 Communications Ltd, is in initial talks with Jabong to acquire the company, as per a report by Mint.
It has initiated the talk to acquire the firm from Global Fashion Group (GFG), an umbrella organisation that is the holding company of several lifestyle e-commerce ventures incubated by Rocket Internet and counts Sweden's Kinnevik among others as shareholders.
The report added, citing sources, that Jabong is being valued at $500-800 million.
This would be a mark-up over $480 million, the level at which Jabong was valued as of last December in its last funding round, according to Rocket Internet’s annual report.
Jabong, which competes with Flipkart-controlled Myntra among others in the lifestyle e-commerce space in India, ended 2014 with gross merchandise value of Rs 1,320 crore with an EBITDA loss of Rs 454 crore. In the first quarter of this year, it emerged as the most loss-making venture among Rocket Internet's top stable.
If the deal materialises, this could be the second-largest deal in Indian internet industry behind Snapdeal's acquisition of FreeCharge early this year and ahead of Flipkart's purchase of Myntra in May 2014.
Spokespersons of Rocket Internet and Kinnevik declined to comment while an email sent to Jabong did not elicit any response. Vijay Shekhar Sharma, managing director and founder of Paytm, too, declined to comment.
Jabong is also looking for a new chief executive as founding team member Praveen Sinha is exiting the company and his partner Arun Chandra Mohanhas has already quit.
This also means a revival in sale talks. Last November, as first reported by VCCircle, e-commerce giant Amazon.com, Inc was in talks to acquire Jabong where the asking valuation was $1.1-1.2 billion. But later, the deal was called off due to a valuation mismatch between the prospective buyer and its shareholders.
If Paytm parent One97 Communications does seal the deal, which could involve a big chunk in stock, it would get a significant leg-up to boost its e-commerce side of the business. Paytm, which started as a mobile recharge platform, is still largely known for its digital payment wallet.
The development comes at a time when the firm is aiming to separate its e-commerce and payments businesses as part of its plans to go ahead first with the payments bank platform.
CarTrade-CarWale
In the online automobile classifieds space, Mumbai-based CarTrade is in final talks to buy CarWale for $120 million, The Economic Times reported, citing sources. If this fructifies, it would be the third such consolidation move in the industry in the last one year.
Last week, Jaipur-based Girnar Software Pvt Ltd, the company behind auto portal CarDekho, acquired Times Internet's auto portal Zigwheels for an undisclosed amount. Last year, in September, CarDekho had acquired Gaadi.com.
The deal would include both its properties CarWale and BikeWale. CarDekho was also in talks to acquire CarWale, according to the newspaper.
Responding to a VCCircle email, the spokesperson of CarWale declined to comment while CarTrade's spokesperson did not reply till the time of filing this report.
In February this year, CarTrade had raised an undisclosed amount from Chip Perry, former founding chief executive of Auto Trader, the largest online auto classifieds company in the US. Last October, it raised Rs 185 crore ($28 million) in funding led by private equity firm Warburg Pincus, with participation from existing investors Canaan Partners and Tiger Global.
