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KKR set to buy controlling stake in Ramky Enviro for $530 million

KKR will buy shares from the promoter Rami Reddy family and external investors including a private equity firm managed by Standard Chartered and IL&FS.

ET Bureau|
Last Updated: Aug 12, 2018, 11.03 PM IST
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RamkyEnviron.bccl
Chennai Municipal Solid Waste Pvt Ltd., a 100% owned subsidairy of Ramky Enviro Engineers Ltd.
MUMBAI: US buyout giant KKR has agreed to buy a 60% stake in Hyderabad-based Ramky Enviro Engineers, a waste management company, for about $530 million. It would be the New York-based private equity firm’s first deal in the sector after Prime Minister Narendra Modi launched a massive clean-up programme.

KKR will buy shares from the promoter Rami Reddy family and external investors including a private equity firm managed by Standard Chartered and IL&FS. A deal may be signed as early as this week, people with knowledge of the matter told ET. Barclays is the sole advisor to the transaction.

KKR declined to comment to the matter. A mail sent to the Ramky Group remained unanswered till the time of going to press. Ramky Enviro Engineers, set up in Hyderabad in 1994, operates facilities to manage industrial, municipal and biomedical waste and offers integrated environmental services and consultancy.

With 7,800 employees, the company has a presence in 55 locations in 17 states and Union Territories. It has offices in the United Arab Emirates, Singapore and Gabon in West Africa, its website showed. Ramky Enviro posted revenue of about .`1,900 crore in the year ended March 2018.

ET first reported in June 2017 that Ramky Group was looking to sell its waste management unit and is in talks with funds such as Blackstone and CDC Group. In its June 19 edition, ET had reported that KKR is in advanced talks to buy out Ramky Enviro.

KKR, one of the most aggressive private equity investors in India, started investing in the country in 2006. The firm has deployed about $4.1billion through its private equity business and another $6 billion though structured credit financing to corporate and real estate-focused companies.

A transaction with Ramky Enviro would be the first global deal in the waste management space for KKR, which rose to global prominence with its $25 billion hostile takeover of US food and tobacco giant RJR Nabisco in 1989.

Prime Minister Modi’s nationwide waste management programme, Swachh Bharat, is aimed at reducing waste in 4,000 cities – cleaning up the streets, roads and infrastructure.

According to a joint study by Assocham and PwC, 10-15% of the waste produced by industry is hazardous and the generation of hazardous waste is increasing by 2-5% per year in India. About 7.46 million tonnes of hazardous waste were generated annually from 43,936 industries in the country, the study showed.

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