Creador books 5.3x on Indian tile maker sale

The Kuala Lumpur-headquartered firm bought Somany Ceramics in 2014 through its $330m second vehicle, Creador II.

South-East Asia-focused private equity firm Creador has sold its remaining stake in Indian ceramics company Somany Ceramics to unnamed domestic institutional investors for INR 3.2 billion ($50 million; €47 million).

The sale will generate a 5.3x return and an IRR of 77 percent in Indian rupee terms (5x and an IRR of 74 percent in US dollar terms) for investors in Creador’s second fund, which raised $330 million in October 2014.

Investors in Creador II include Hamilton Lane, Hermes GPE and Siguler Guff, according to PEI data.

Somany, listed on the Bombay Stock Exchange and the National Stock Exchange of India, is the country’s second largest tile maker. Somany sells ceramic, vitrified tiles, sanitary ware and bath fittings through a network of over 10,000 dealers across India.

Creador acquired a 13.6 percent stake in Somany in February 2014 for INR 624 million and offloaded some 3 percent of its stake in October 2015 at 2.9x returns, the firm said.

During Creador’s three-year ownership, Somany’s revenue grew from INR 12.6 billion in 2014 to INR 17.2 billion in 2017 on an annualised basis, while its net income grew almost three-fold during the same period.

“Creador is pleased to have played a role in supporting Somany during this growth phase, including being an active board member and providing strategic advice to support their growth and expansion plans, Creador senior managing director Anand Narayan said in a statement. “We remain confident on the long-term growth prospects of Somany and believe that the company will continue to create value for all its stakeholders.”

This is the firm’s second successful exit in the past two months, having sold its 28.3 percent stake in Malaysian payment services provider GHL Systems Berhad in March this year to growth markets investor Actis. The sale generated a return of 2.8x and an IRR of 40 percent in Malaysian ringgit terms.

Kuala Lumpur-headquartered Creador has over $800 million of assets. The firm is also in the process of deploying $415 million Creador III, its latest buyout vehicle that targets consumer businesses in Indonesia, Malaysia, Singapore, India and the Philippines.