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Advent, Temasek pick up Crompton Greaves consumer unit

The pair will acquire 34.37% in a deal valuing CG’s consumer products arm at more than $1bn

Global buyout house Advent International has agreed to acquire 34.37 percent of Crompton Greaves’ consumer products business alongside Singaporean sovereign wealth fund Temasek, according to a statement.

The pair are acquiring the stake from current owners Avantha Holdings in a deal valuing Crompton Greaves Consumer Electricals Limited (CGCEL) at INR 66 billion (€960 million; $1.03 billion), with the remainder of the stocks to be listed on the National Stock Exchange of India and Bombay Stock Exchange.

Advent and Temasek will then make an open offer for additional shares in CGCEL, the statement said.

Advent is investing in CGCEL using capital from its €8.5 billion Global Private Equity Fund VII, a 2012-vintage.

Crompton Greaves provides electrical products, systems and services for utilities, power generation, industries and consumers. The company is organised into four business groups: power, industrial, automation, and consumer. CGCEL, the consumer arm, manufactures and markets a range of consumer products including fans, lamps, pumps, water heaters, toasters, irons and electric lanterns.

CGCEL, which employs around 3,500 people and has six manufacturing facilities, has grown at a compound rate of 16 percent per year for the last six years, generating revenue of INR 28.5 billion (€413 million; $450 million) for the fiscal year ended 31 March 2014, according to Advent.

“As a standalone company, CGCEL would be able to pursue more strategic goals and thus maximise value for all its stakeholders,” Laurent Demortier, CEO and managing director of CG said in a statement.

After completion of the deal Advent intends to drive growth through investing in sales and marketing, distribution and “enhanced” product offerings, according to Shweta Jalan, Advent’s managing director in Mumbai.

Advent has been investing in India since 2007 and opened its Mumbai office in 2009. Among its Indian investments is CARE Hospitals, a multi-specialty hospital chain in South and Central India in which the firm invested INR 523 crore (€78 million; $105 million) in 2012, PEI reported at the time.

On Monday Advent announced that it had provided an undisclosed amount of equity to CARE to acquire a new hospital with 250 beds in Hi Tech City, a suburb of Hyderabad. This follows CARE’s recent addition of a 100-bed facility in Vizag. The two transactions further consolidate the group’s presence in the states of Telangana and Andhra Pradesh, CARE said in a statement.