Report: KKR to invest in Indian cricket franchise

The private equity firm is reportedly negotiating a 47 percent stake in Deccan Chargers, a Hyderabad-based cricket team, in what will be the first private equity investment in an Indian sports franchise. The deal is estimated to be worth $20m.

Kohlberg Kravis Roberts is reportedly seeking to acquire a 47 percent stake in Deccan Chargers, a cricket franchise that participates in the Indian Premier League. The firm is in the final stages of discussion to acquire the stake, which could be worth about $20 million, according to India’s Economic Times.

According to Indian media reports, the cricket franchise has appointed KPMG to facilitate the sale of the minority stake. KKR is the only private equity firm to have submitted a term sheet to the franchise, the Economic Times stated.

The Deccan Chargers franchise is owned by Deccan Chronicle Holdings, a Hyderabad-based newspaper publisher. Deccan Chronicle paid $107 million for the franchise, to be paid over 10 years. The team has been in existence for a year now, and Deccan Chronicle has paid $10.7 million so far.

In the first edition of the tournament, the Deccan Chargers fared poorly and finished last out of eight teams,

An Indian Premier League
match in progress

despite of spending the most money at an auction to buy players. The franchise’s parent company has also seen its third quarter profits for 2008 drop by 45 percent compared with the correspnding last year as a result of rising newsprint, raw material and staff costs.

A couple of of other Indian Premier League franchise owners are also reportedly looking to divest their interests. Considering cricket’s popularity in India, and the success of the inaugural edition of the tournament held earlier this year, owning a franchise or a stake in one is potentially a highly lucrative opportunity.

When the city-based franchises were being auctioned by the Indian cricket board last year, a few private equity firms such as ICICI Venture, Sequoia Capital and Providence Equity Partners also reportedly bid for teams but lost out.

Deccan Chargers could not be reached for comment. KKR declined to comment.