TPG, Northstar in $1.52bn Indonesia exit

The firms stand to gain a 7x return for their stake in Indonesian national bank TPN after selling 40% to Japan’s Sumitomo Mitsui Banking Corporation over two separate transactions.

TPG Capital and its Indonesian partner Northstar Pacific Partners have sold 24.26 percent of Indonesian commercial bank Bank Tabungan Pensiunan Nasional (BTPN) to Japanese Sumitomo Mitsui Banking Corporation, according to a statement from Sumitomo. 

The parties also have an acquisition pending approval from Indonesian regulatory authorities for another 15.74 percent of BTPN to make a total stake of 40 percent, after which Sumitomo will be the significant minority shareholder in the bank. Due to newly enforced regulatory restrictions in Indonesia, Sumitomo’s ownership of the bank is likely to be capped at 40 percent, sources say.

The first tranche of the investment equated to 1.41 billion shares sold at INR 6,500 (€0.51; $0.67) per share.

Japanese bank Sumitomo Mitsui Banking 
Corporation moving into Indonesia

The firms did not disclose the exact deal value, but a source close to the matter confirmed to Private Equity International that the two investments combined will be worth a total of $1.52 billion and represent a return multiple of 7x for the private equity duo. 

 TPG bought 71.6 percent of BTPN for around $200 million in June 2007 and has been one of the most active global funds in Indonesia over the years through its partnership with local firm Northstar. The firm diluted its stake to 57.9 percent in 2010.

TPG is also in the midst of raising its sixth Asia Pacific fund targeting $4 billion, for which a strong exit would no doubt be helpful. The firm made a first close in September 2012 on $1.5 billion, but is yet to reach its target, according to PEI’s Research & Analytics division. TPG declined to comment on fundraising.

Sumitomo intends to work closely with BTPN and diversify its business in Asia, especially in Indonesia, according to the statement. It noted the country’s rapid and sustainable growth due to its large population and expansion of the middle class as drivers behind the investment. 

CVC Asia Pacific had some similar success recently, but on the Indonesian stock market. In a long-awaited partial exit, the Asian arm of European buyout firm CVC Capital Partners sold 40 percent of Indonesia-based Matahari Department Stores in March. 

The deal was worth $1.3 billion, having priced the 1.17 billion shares divested at Indonesian Rp 10,850 (€0.86; $1.12) per share, a source close to the matter confirmed to PEI earlier. CVC expects to gain a 7x-8x return on its investment, a source close to the firm said, although CVC would not comment on the exit multiple.

TPG is a global private equity firm with about $72 billion in assets under management, according to PEI’s Research & Analytics division. It was founded in 1992 as Texas Pacific Group by founding partner David Bonderman. The firm was recently named as the biggest private equity firm in the world by the PEI 300, having raised $35.7 billion globally over the past five years. It topped the ranking for the third year running.