PRINT THIS PAGE Season for M&As05/08/2004. Source: AltAssets.
Charging alongside India's impressive economic growth is the country's record merger and acquisition activity. This surge in M&A transactions is providing India's private equity firms with the vital opportunity to either exit or merge their existing portfolios, according to the Asia Private Equity Review. A deal involving eBay has attracted particular notice. The online auction giant
will deploy $50m to acquire Baazee.com and its subsidiary Baazee.com India Pvt.
Ltd., the country’s largest online merchandise exchange platform operator.
The deal is part of eBay’s strategy to access the world’s second
most populous nation.
The entry of eBay would invite the sale of shares by two well-known Indian
private equity/venture capital firms. In the first half of 2000, shortly after
Baazee.com went into operation, it received over Rs.1 billion from a host of
global and domestic venture investors. Outside of India, Baazee.com attracted
funds from STAR TV, Global Bridge LLC, Viventures as well as eVision Holdings,
a Latin American company. Joining this prestigious list of investors were two
Indian private equity firms ICICI Venture Funds Management and ChrysCapital.
STAR TV is understood to be the largest investor, committing $10m.
The transaction is expected to be completed by the third quarter this year.
Both ICICI Venture Funds Management and ChrysCapital are expected to complete
their respective exits from Baazee.com by that time.
Baazee.com has approximately one million registered users. With an operational
history of four years, it has already recorded a net profit. For eBay, the acquisition
of Baazee.com represents its third major takeover in a two year period in the
Asian market.
In March 2002, on the heels of acquiring NeoCom in Taiwan, eBay deployed $33m
to take up a 33 per cent stake in China’s Eachnet, which was partially
owned by two private equity firms. Within 12 months, eBay assumed full ownership
of Eachnet, the leading online trading platform in China, when it paid an additional
$150m and took up the residual 67 per cent of the company.
In a similar vein, The Chatterjee Group, a global private investment company
focused on communications and information technology (‘IT’) services
sector, recently acquired iVega Corp., a software services and IT consultant.
While the transaction amount was not disclosed, The Chatterjee Group's move
will facilitate the divestment of Global Technology Ventures and ChrysCapital,
the two major venture investors in iVega. Together, they have invested $6m in
iVega.
The case of Bayan Networks, differs in that its venture investors will stay
on following the company's acquisition by Midas Communications. Venture capital
investors including IL&FS Investment Managers and Sycamore Ventures held
a 53 per cent equity position in Bayan Networks prior to the takeover. Since
1999, Bayan Networks, a wireless telecomm firm, has placed its shares on three
occasions and received an aggregate of $40m.
Asia Private Equity Review (APER) is the foremost voice
on matters related to private equity/venture capital in the region. Well-recognised
as being the singular source for accurate and timely news, in-depth analysis
and global perspectives, APER is published by the Hong Kong-based Centre for
Asia Private Equity Research. For further information please visit our website
at www.asiape.com or email us at info@asiape.com
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