Exits continue to elude GPs in India, but this week The Carlyle Group revealed the sale of its investment in India-based Cyberoam Technologies to UK security software firm Sophos, according to a statement.
Carlyle declined to provide financial details of the transaction, but said in the statement it had held a majority stake.
First Carlyle Ventures Mauritius, the growth vehicle Carlyle used for the investment, acquired a majority stake in parent company Elitecore Technologies in 2007, reportedly for $10.3 million, during the boom years of private equity investment in India. It later invested a further $3.1 million.
Elitecore's network security business, Cyberoam, then spun off in 2012.
Investors poured money into India from 2006 to 2008, but many GPs have been unable to exit those investments. The decline of the rupee against the US dollar last year and the quiet capital markets have continued to discourage exits.
However, despite macroeconomic difficulties, which include a slowing growth rate, plummeting currency and high current account deficit, Carlyle grew Cyberoam’s revenues six times, nearly quadrupling its profits, over the its seven-year holding period, according to the firm.
Carlyle redefined Cyberoam’s business strategy for product development and marketing with a strategic focus on emerging markets, according to one source close to the matter. The firm also drove its geographic expansion and assisted in key aspects of Cyberoam’s spin-off from Elitecore.
“Carlyle has worked with a talented management team with passion, energy and a commitment to innovation, which has led the company to a prominent position in emerging markets, including [a number one] market share in India and top two [or] three in Southeast Asia, Africa and the Middle East,” Shankar Narayanan, a managing director at Carlyle, said in a statement.