Venture Intelligence in the Media: KKR-Flextronics deal

Pvt equity giants jostle for slice of India pie
Economic Times – Apr 19, 2006

“Clearly, the growth investments will make up the volume, but buyout deals will continue to tilt the numbers. But the market will segregate, with each player finding its sweet spot in the future,” says Arun Natarajan, editor, Venture Intelligence.

Buyout deal by KKR is India’s largest ever
International Herald Tribune – Apr 17, 2006

According to Venture Intelligence India, private equity and venture capital firms invested $2.2 billion in India in 2005, spread across 146 deals. That sum was up 33 percent from the $1.65 billion in investment the year before.

…Now, analysts say, the Flextronics deal, nearing the $1 billion mark, will lend new credence to the trend. In a single deal, KKR will have invested nearly as much in India as the two current major players in private equity here, Warburg and Temasek, have invested over a period of several years.

“When these guys came to town, people were skeptical about whether these guys can get deals done,” said Arun Natarajan of Venture Intelligence India, which publishes industry newsletters. “People were wondering: Are there enough $100 million-plus deals here? So it’s validation when there’s a deal this size. A couple of years ago, people would not have believed that a deal this big was possible. The fact is that for people like KKR, India was not even on their radar until the GE deal happened.”

KKR pays $900M for India’s Flextronics software unit
USA Today- Apr 17, 2006

“This is good news for private equity in India. It shows large deals can get done and will attract other buy-out firms to the country,” said Arun Natarajan at Venture Intelligence India. “However, we fully expect the volume of deals to continue to mainly come from smaller growth-oriented transactions.”

Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.