June 09 2010
The deal marks BanyanTree Growth Capital’s fifth investment in India and its first in the current year.
BanyanTree Growth Capital LLC, the Mauritius-based $115-million mezannine fund, has invested $15 million in Deepak Fasteners Limited (DFL), a manufacturer of speciality industrial fasteners, for an undisclosed minority stake. BanyanTree will have a Board representation.
This is the second round of institutional money flowing into Deepak Fasteners. Earlier this year, it raised its first round of $15 million from BanyanTree Growth Capital LLC, a Mauritius based private equity fund.
Mumbai-based Ladderup Corporate Advisory Private Limited was the advisor to the transaction.
Promoted by the Kalra family of Ludhiana, DFL is one of the leading manufacturers of specialty industrial fasteners used in hostile environments, where extremes of temperature, pressure and mechanical vibrations are encountered. In 2008, DFL acquired the worldwide rights of the Unbrako brand from SPS Technologies, a subsidiary of PCC group of USA, along with a manufacturing facility in Shannon, Ireland. In India, DFL has three manufacturing facilities across Punjab and Himachal Pradesh.
Unbrako is the most coveted industrial fasteners brand in the world with a history going back a 100 years. It is credited with the invention of now common place engineering fasteners such as the socket head cap screw. Unbrako is the preferred supplier to F1 racing cars. Closer home, it supplied fasteners for the Bandra-Worli Sea Link project, Delhi Metro and Mumbai International Airport.
According to Sanjeev Kalra, MD of DFL, the BanyanTree investment will help DFL to increase manufacturing capacities and help it enter new markets and further capitalize upon the opportunity to combine a world renowned brand with India’s low cost manufacturing base. DFL envisages a further investment of over Rs 250 crore during the next year.
The deal marks BanyanTree Growth Capital’s fifth investment in India and its first in the current year. It has earlier invested in a Mumbai based IT Infrastructure management services company Trimax IT Infrastructure & Services Ltd for a 10% stake. Banyan Tree has previously co-invested with Dutch entrepreneurial development bank FMO in synthetic rope manufacturer Axiom Impex ltd. The duo also invested in Kalpena Industries, a manufacturer of PVC compounds.