Speaking of Reliance Jio Platforms, the top Indian telecom operator said on Saturday it has secured another investment.
L Catterton, a U.S. private equity firm will invest $250 million for a 0.39% stake in Jio Platforms, becoming the ninth investor to back the Indian firm at the height of a global pandemic.
L Catterton, a firm known to invest in consumer tech businesses, has backed dozens of young and established firms over the years including Peloton, style=”font-size: 1.125rem; letter-spacing: -0.1px;”>Vroom, ClassPass, Owndays and PVR Cinemas.
The announcement, which makes L Catterton the ninth investor to back Jio in eight weeks, comes hours after the three-and-half-year-old telecom network said it was selling stake worth $600 million to TPG. The new investment, like that of TPG, values Jio Platforms at $65 billion.
Reliance Jio Platforms has now secured more than $13.7 billion by selling about 22.3 stake to Facebook, Silver Lake, KKR, Vista Equity Partners, General Atlantic, Mubadala, Abu Dhabi Investment Authority, TPG, and L Catterton in the past eight weeks.
“We look forward to partnering with Jio, which is uniquely positioned to execute on its vision and mission to transform the country and build a digital society for 1.3 billion Indians through its unmatched digital and technological capabilities,” said Michael Chu, co-chief executive of L Catterton, in a statement.
Investors’ bullishness on Jio Platforms, which has amassed over 388 million subscribers, shows their growing interest in India’s telecom market. Media reports have claimed in recent weeks that Amazon is considering buying stakes worth at least $2 billion in Bharti Airtel, India’s third largest telecom operator, while Google has held talks for a similar deal in Vodafone Idea, the second largest telecom operator.
Jio Platforms also operates a bevy of digital apps and services including music streaming service JioSaavn (which it says it will take public), on-demand live television service JioTV and payments app JioMoney, as well as smartphones, and broadband business. These services are available to Jio subscribers at no additional charge.
Pankaj Jain, a high-profile angel investor, told TechCrunch that Jio Platforms’ digital services suite appeared to have helped it attract foreign investors. “Foreign investors see that owning the pipes is a race to the bottom in terms of ARPU (average revenue per user) but having so many bundled services seems like it’s the future for telecommunications companies. By solidifying their content strategy, they have appealed to investors that are seeing this same strategy play out in other markets,” he said.
“Unfortunately, it’s still to be seen whether content can help increase margins significantly in India.”
Though Reliance Jio Platforms has not revealed why it is raising so much money, this capital could be deployed to cut oil-to-retails giant Reliance Industries’ net debt of about $21 billion, said Mahesh Uppal, director of communications consultancy firm Com First, in a conversation with TechCrunch.
Ambani pledged to clear Reliance’s due by early 2021. Reliance Industries had no debt in 2012, but that changed when the company decided to enter the telecommunications market. “I particularly look forward to gaining from L Catterton’s invaluable experience in creating consumer-centric businesses because technology and consumer experience need to work together to propel India to achieving digital leadership,” said Ambani in a statement today.
Aflac Global Investments, a subsidiary of insurer Aflac Inc. (NYSE: AFL) is forming a partnership with middle-market lender Varagon Capital Partners. Varagon is also extending its partnership with American International Group. Aflac is committing up to $3 billion for Varagon to invest in mid-market loans, and is also buying the minority stake in Varagon held by former and current Oak Hill Capital partners andaffiliates. Aflac and AIG will own equal stakes in Varagon, and the deal does not reduce Varagon’s ownership. “Middle market credit is a strategically important asset class for Aflac and we are excited to partner with Varagon,” says Aflac global chief investment officer Eric Kirsch. Varagon made about $14.5 billion in financing commitments to around 180 companies, as of Dec. 31. “These long-term commitments from two world-class insurers provide access to substantial capital, enhance Varagon’s capabilities to serve investors and borrowers, and accelerate the execution of our strategic growth objectives,” says Varagon CEO Walter Owens.Wells Fargo Securities and Davis Polk & Wardwell LLP are advising Varagon. Rothschild and Debevoise & Plimpton are advising Aflac. Cadwalader, Wickersham & Taft LLP is representing AIG.
Mergers & Acquisitions has opened up the nomination process for the 13th Annual M&A Mid-Market Awards, which will honor leading dealmakers and deals that set the standard for transactions in the middle market in 2019. Nominations are accepted only through our electronic forms. The deadline is Friday, Feb. 7, 2020. There is no fee. For more information on the nomination process and what we seek in winning candidates, see Call for nominations: Submissions for the M&A Mid-Market Awards due Feb. 7.
DEAL NEWS Apax Partners and L Catterton have invested $285 million in ClassPass, which gives people access to gyms and fitness studios and allows them to make reservations online. Apax and L Catterton join existing investor Temasek. Kirkland & Ellis represented L Catterton
Industrial Opportunity Partners has acquired acquired Midwest Recycled and Coated Containerboard Mill. The latter manufactures recycled containerboard, for packaging, recycled bag products and white paper for book publishing and printing materials. McDermott Will & Emery represented IOP. JP Morgan Chase Bank and Yukon Partners provided financing.
Human behavior and data analytics firm Escalent has purchased Javelin Strategy & Research from Greenwich Associates. The deal expands Escalent’s presence in retail and small business banking. Marlin & Associates advised Javelin.
Entrepreneurial Equity Partners-backed Daniele International has merged with Creminelli Fine Meats. The target is a producer of charcuterie and protein snacks. BofA Securities advised the Creminelli.
Rockwell Automation (NYSE: ROK) is buying cybsecurity company Avnet Data Security.
PEOPLE MOVES Mark Satran has joined aerospace and defense-focused private equity firm AE Industrial Partners as a senior managing director. He was previously with Alterna Capital Partners.
Ian Read, a former Pfizer (NYSE: PFE) CEO, was hired by the Carlyle Group (Nasdaq: CG) as an operating executive in the firm’s healthcare group. Read will help Carlyle find healthcare investments. Separately, Carlyle partner Bryan Corbett was hired by the Managed Funds Association, the hedge fund’s industry main trade association, as its new president. The group lobbies on tax and financial regulation issues.
WIlliam Perlstein has joined FTI Consulting Inc. (NYSE: FCN) as a senior managing director and vice chair, client services. He was most recently with BNY Mellon.
Brian Brownschidle, Roger Gill and David Lloyd have been promoted to managing directors at financial services firm XMS Capital Partners.
FEATURED CONTENT If there’s anything M&A professionals dislike, it’s uncertainty. And heading into 2020, there’s more than enough uncertainty to go around, including questions about the economy, international trade, impeachment, domestic politics and more. The funny thing is, the lack of clarity may actually make the first half of the year a great time for M&A, as dealmakers push to close transactions before the looming uncertainty of Election Day and its outcome. We conducted interviews with 8 investment bankers and other M&A advisors. Some said the first half of the year will be robust, while others said the uncertainty may have a negative impact throughout 2020. Read the full story, What’s ahead for M&A in 2020? We ask 8 advisors.
Mergers & Acquisitionshas named the2020 Most Influential Women in Mid-Market M&A. This marks the fifth year we have produced the list, which recognizes female leaders with significant influence inside their companies and in the wider dealmaking world. It’s been gratifying to watch the project evolve over the years – and become more influential itself. This year, we received more nominations than ever before. As a result, we expanded the number honored to 42 in 2020, up from 36 in 2019. Many dealmakers are new to our list, including Rockwood Equity Partners’ Kate Faust, William Blair’s Shay Brokemond and Avante Capital Partners’ Ivelisse Simon. Read our full coverage of all the champions of change on our list, including Q&As with each individual.
Mergers & Acquisitions examines the impact of 7 technologies on M&A in the retail sector. Read the whole series:
Albertsons, Kroger Co. (NYSE: KR), Stop & Shop and Walmart (NYSE: WMT) are building automated mini-warehouses and “dark stores” to make deliveries and prepare pickup orders. Mini-warehouses are usually attached to existing stores, and in most cases, “dark stores” are completely separate. Both formats are closed off to customers, and are mostly automated. They use the assistance of robots for speed, save on labor, and get orders out faster. Kroger bought a five percent stake in robotics firm Ocado. Read our full coverage: Smart supermarkets become popular, as Kroger, Walmart add them.