Chennai-based integrated facilities management services firm Updater Services Pvt. Ltd (UDS) has raised Rs 100 crore (around $15 million) from MOPE Investment Advisors Pvt. Ltd in return for a minority stake, it said in a statement.
The fund has committed capital through its India Business Excellence Fund – II and India Business Excellence Fund – IIA.
This is the third round of private equity investment in UDS, which previously saw investors such as New Vernon Private Equity and ICICI Venture investing in 2004 and 2008, respectively.
VCCircle first reported that the company was in the final stage of talks to raise Rs 100 crore of equity capital from a single private equity firm.
Established in 1985, UDS has operations across the country with a strong presence in south India, and caters to more than 700 clients across industries such as IT/ ITeS, BFSI, e-commerce to name a few.
Raghunandana Tangirala, managing director of Updater Services, said, “Partnering with Motilal Oswal Private Equity will help the company expand its operations. MOPE will help us deepen client relationships and offer integrated business services to our clients''.
Vishal Tulsyan, managing director and CEO of MOPE, said, “We are pleased to be part of what, according to us, is one of the best placed integrated facilities management companies in the country. Updater Services is one of the oldest brands in the country with a proven track record of providing quality services''.
Veda Corporate Advisors acted as the financial adviser for Updater Services for the transaction.
The fundraise comes two years after UDS bought out the 41.17% stake held by private equity firm ICICI Venture through a special purpose vehicle owned by the firm’s promoter. Following the deal, UDS became a fully owned entity of the promoter group.
In April last year, the firm hired former chief financial officer of AirAsia India, Vijay Gopalan, to head the firm and grow the business strategically through diversification and by adding new service lines. However, Gopalan quit UDS within two months of joining the firm, according to his LinkedIn profile.
The company offers facilities management, people and staffing services, production support services and industrial asset management services.
MOPE is a subsidiary of Motilal Oswal Financial Services Ltd. (MOFSL), a diversified financial services group with businesses in securities, asset management, private equity and investment banking.
MOPE is currently managing two growth capital funds - India Business Excellence Fund (IBEF) and India Business Excellence Fund II (IBEF II) - focused on providing growth capital to mid-market companies, typically in the range of $10-20 million, across sectors.
IBEF, launched in 2007 is a Rs 550 crore ($125 million) fund and is fully invested in 13 portfolio companies across sectors such as food processing, bulk packaging, power transformers and power infra enablers, ITES, financial services, EMS, FMCG, auto components, etc. It has already made 10 exits. The IBEF II is a Rs 950 crore ($160 million) growth capital fund.
Facility management deals
The facility management and related space has seen several deals in the last couple of years.
Several top global PE firms are in the race to buy into facilities management firm BVG to give exit to private equity firm 3i Group Plc. The secondary transaction for 3i’s stake is likely to fetch $100 million, clocking two-and-a-half times returns on its five-year-old investment.
CX Partners-backed Security and Intelligence Services (India) Ltd (SIS), which is bound for an IPO, agreed to acquire facility management company Dusters Total Solutions Services Ltd (DTSS). Private equity firm TVS Capital, which owns 51% stake in DTSS, is expected to get around Rs 115 crore ($17.4 million).
Fairfax-controlled Quess Corp (earlier Ikya Group), which is a subsidiary of tour operator Thomas Cook (India) Ltd and had a stellar listing last year, has been growing through acquisitions, diversifying and creating a string of services. It has acquired 10 companies since 2010 and plans to continue its inorganic expansion drive.
According to Frost & Sullivan, the industry is expected to grow from Rs 8,414.7 crore in 2015 to around Rs 20,000 crore by 2019.
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