KKR acquires 60 per cent stake in Ramky Enviro for $530 million, existing PE firms exit

PE firm KKR and Co., Inc. has acquired a 60 per cent stake in environmental solution provider Ramky Enviro Engineers Limited for about $530 million (Rs 36.67 billion). This is the largest buyout by a PE firm in India’s environmental services sector. The acquisition was done through a combination of primary and secondary investments from KKR’s Asian Fund III. As part of the deal, KKR acquired shares from Ramky’s promoters as well as IL&FS Investment Managers Limited (IL&FS PE) and the Standard Chartered IL&FS Asia Infrastructure Growth Fund (SCI Asia). SCI Asia — a joint fund between IL&FS PE and Standard Chartered PE – and IL&FS PE, through its Tara India Fund III, had invested Rs 1 billion each in Ramky in 2009. The deal with KKR fetched a 3.25 times return for the two PE funds. This translates to an internal rate of return, or annualised return, of 15 per cent.