Samara plans to close its third fund of $550 million (Rs 39.1 billion) by the end of this year. It had raised two others worth around $700 million since its launch in 2007. And, is expected to use 70 per cent of the proposed fund for buyout or control transactions.
An e-mail to Samara Capital did not elicit any response.
“They already have a strong food platform and taken the famous Paradise Foods biryani chain to different cities with the promoters,” sources said. In 2016, Levi Strauss India's managing director, Sanjay Purohit, joined Samara Capital as partner for its consumer and retail platform. He was also named chief executive of Sapphire Foods, a franchisee for Yum! Brands Inc’s KFC and Pizza Hut businesses in this country. Purohit also became a board member of Hyderabad-based restaurant chain Paradise Food Court, in which Samara had invested.
It is not the only one to do so. PE firms are not only investing in companies
but using some of these as platforms to acquire other companies
in the space.
Last year, TPG Growth, a mid-market investment arm of TPG, set up Asia Healthcare Holdings (AHH), for its investment in India and Asia in the segment. The portfolio currently consists of Cancer Treatment Services International and Bengaluru-based Rhea Healthcare, which operates a network of hospitals for woman and children under the 'Motherhood’ brand.
PE major KKR is using Emerald Media and Avendus Capital as platforms to acquire more companies in these spaces. Emerald Media has bought four companies since KKR set up the platform. ICICI Venture formed a platform company with Tata Power to buy stressed power assets. Last week,
Resurgent Power announced plans to acquire 75 per cent in Jaypee’s troubled 3X660 Mw Prayagraj Power project.
From big Canadian pension funds to home-grown funds such as Everstone or IDFC Alternatives, PE investors are opting to buy or build platforms for more say on the outcome of their investments.
And, as buyouts rise, platforms are gaining ground. Driving these is the increase in buyout deals and entry of large investors like pension funds which are willing to write bigger cheques. Platforms can also be quickly scaled up or turned around and are attractive for other investors. While PE firms have been building or buying platforms, what is new is how some are using these to acquire more assets.
A platform is an aggregation of assets, which leads together for an investment theme.
A platform company is a holding company for unlisted assets, which the sponsors can list to monetise. Large investors, who invest hundreds of millions in an asset, find it better to control things through a platform company.
Few such examples are the Thames Water Company, where three Canadian pension funds were the sponsors and Japan Solar, which consolidates solar power projects in Japan, had four investors.