Bengaluru: In one of the largest buyouts in the country, global investment firm KKR on Sunday said it has agreed to acquire a 60% stake in environmental services provider Ramky Enviro Engineers Ltd (REEL) for nearly $530 million through a combination of primary and secondary investments. The investment values the company at $925 million, KKR said in a statement.
KKR’s investment in Ramky Enviro Engineers is also the first private equity buyout in the country’s highly attractive environmental services sector.
Ramky Enviro Engineers' suite of offerings includes the management, collection, transport and processing of hazardous, municipal, biomedical and e-waste, as well as the recycling of paper, plastic and chemicals. The company also focuses on renewable energy generation – with a strong focus on waste-to-energy processes – and offers consulting and integrated environmental services. It has a presence in over 60 locations across 20 Indian states, as well as in certain Southeast Asian, Middle Eastern and African markets. It handles 3.5 million tons of municipal waste, 1 million tons of industrial waste, and caters to 20,000 healthcare establishments.
“With KKR as our new partner, we look forward to advancing our mission of responsibly addressing the environmental issues that emerging economies including India are facing today,” said M. Goutham Reddy, managing director and chief executive of Ramky Enviro Engineers.
Ramky Enviro Engineers focuses on sustainability and as a part of this commitment, it uses a number of systems to monitor its procedures to ensure the adherence to best environmental management standards. It frequently samples and analyses its business’ impact on the air, soil and water of the areas where it operates, and it manages community outreach and engagement programs.
“REEL’s work uniquely supports the Swachh Bharat Mission, and our team is pleased to invest in the growth of a company that provides critical services and infrastructure to reduce pollution and address the needs of India’s expanding urban population,” said Sanjay Nayar, member and chief executive of KKR India.
KKR made the investment from its Asian Fund III. Raised last year, the fund has a corpus of nearly $9.3 billion and focuses on investments in private equity transactions across the Asia Pacific region.
“We look forward to leveraging our resources to enhance REEL’s operational best practices and add value by focusing on engineering innovation, attracting managerial talent and boosting efficiency, in addition to building on REEL’S rigorous focus on environmental, health and safety initiatives,” said Rupen Jhaveri, managing director at KKR.
KKR’s other buyout transactions in India include Alliance Tire Group, Gland Pharma and Aricent. The PE firm has exited all these investments.
Over the past decade or so, KKR has invested over $8.5 billion in Indian companies—half that in PE deals, and the rest in credit to more than 100 companies through its non-banking finance company. This is one of the largest capital exposures by a global PE investor in India. More important, KKR has half a dozen PE portfolio exits under its belt currently and its returns from the country already stand at over $3 billion. From its credit portfolio, it has exited from over 60 firms.
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