KKR may sell 60%  stake in Ramky for $1bn

Sep 21, 2021 | News

Singapore’s state investor Temasek Holdings and Canada’s Brookfield Asset Management are among at least four global investors looking to buy US private equity firm KKR’s 60% stake in Ramky Enviro Engineers for at least $1 billion, two people directly aware of the matter said.

This follows the Hyderabad-based company abandoning a plan for a public listing to offer an exit to KKR, the people said, requesting anonymity.

“The fresh plan is to monetize the stake by selling it to a clutch of other global investors, irrespective of the IPO which was earlier being planned by Ramky Enviro in which KKR would have sold its stake through a secondary market window,” one of the two people said, referring to the earlier plan for an initial public offering.“The fresh plan is to monetize the stake by selling it to a clutch of other global investors, irrespective of the IPO which was earlier being planned by Ramky Enviro in which KKR would have sold its stake through a secondary market window,” one of the two people said, referring to the earlier plan for an initial public offering.

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KKR wants to exploit a growing global penchant for companies offering environmental services amid a wider awareness about investments aimed at protecting the environment. A potential deal would be the largest in the environmental services industry in India.

“The valuation of Ramky Enviro has gone up significantly, with companies around the world increasingly focusing on ways to prevent environmental damage due to the nature of their businesses,” the person cited above said.

The remaining 40% stake in Ramky Enviro is held by Ayodhya Rami Reddy, founder and chairman, Ramky Group, with businesses spanning infrastructure, environmental services, pharmaceuticals and consultancy services.

“There are at least four large global investors who are willing to invest in Ramky Enviro. Temasek Holdings and Brookfield Asset Management are in talks to buy a chunk of KKR’s stake in Ramky. Additionally, two other marquee private equity firms may also come in as new investors. The current discussion pegs the proposed transaction at around $1 billion for KKR’s entire stake,” the second person said.

JP Morgan has been hired as the banker to KKR for the proposed transaction.

Source: Mint

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