finance

Exploring PE Investing in Niche Manufacturing & Industrial Services Companies with Capital Roundtable

Middle market industrial-focused private equity (PE) firms are increasingly turning to the world’s fastest growing economies to boost portfolio company returns at a time of sluggish economic growth in the US.

Growing a portfolio company’s international footprint is key to increasing returns today, according to participants in a recent Capital Roundtable conference entitled Private Equity Investing in Niche Manufacturing & Industrial Services Companies: Strategies for Enabling Profitability in a No-Growth Environment. Opportunistic international expansions into complex markets such as China, India and Brazil can distinguish a company from its competitors, in effect boosting its value to strategic buyers.

Bolt-on acquisitions of production facilities, suppliers, distributors or other assets appear to be the favored approach of PE companies keen to push portfolio firms into new markets. That’s because it’s challenging to facilitate organic growth via greenfield expansion projects in a roughly two to five year timeframe. Also, other forms of international expansion, such as joint ventures, frequently complicate both PE firms’ ability to control the day-to-day operation of portfolio company’s business and the process of exiting an investment.

Expanding via M&A does not come without challenges. Firms may find it difficult to navigate complex accounting, regulatory and compliance rules associated with new markets, according to attendees at the Capital Roundtable event. Also, they have difficulty identifying managerial talent in foreign countries, despite the emergence of new sources of talent in recent years.

Growing a portfolio company’s footprint beyond the US’ borders can be worthwhile, particularly for PE firms with the time facilitate long-term growth. But the expansion process is not without its pitfalls.

On Thursday 10 November, IIICORP and The Capital Roundtable will be hosting a conference entitled “Best Practices for PE Portfolio Companies to do Business Globally”.

 

Visit our newly-released website for more information on IIICorp’s deal origination platform. For more information on a trial, visit https://www.iiicorp.com/ContactUs

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IIICorp opportunity of the week: GMH seeks funding for proposed USD 800m Tamil Nadu-based TPP

General Mediterranean Holding (GMH) is looking for financiers for its proposed 1030MW merchant thermal power plant at Kattuppalli Village in Thirvallur district in Tamil Nadu (TN), according to Justin Paul, the President Technical at Chennai Power Generation Limited (CPGL), the Indian subsidiary of the Luxembourg-based company.

“The project is awaiting environment clearance, land acquisition, and fuel-supply agreement for the power plant and we will look at financial closure of the plant in the first quarter of 2018,” Paul told this news service.

The company president did not provide a timeline when the EPC tenders would be invited but said that the bids would be invited soon after the environment clearances and fuel supply agreements are in place.

The 1030MW power project had experienced difficulties when North Chennai Power Company Limited refused to spare 70 acres of land to CPGL for the plant due to a reported overlap in location of the two companies’ power plants. The terms of reference (ToR) for the project were initially issued in 2009, however these expired in 2013 due to the inability to resolve the land issue. A fresh application to issue the ToR was submitted in September 2015, which was approved in early June this year.

The total project investment (TPI) comprises USD 788.5m (Rs. 5245.6 crore) and the facility will source coal from Indonesia and Australia. It will consist of two 515MW steam turbine generator (STG) sets and two pulverized coal-fired subcritical boilers. The balance of plant (BoP) package will comprise the coal and ash handling plant, water treatment plant, desalination plant, compressed air system, electrical controls, instrumentation and control, and chimney, all of which cost USD 639.3m.

The total plant area will cover about 319 acres of land, including an ash pond area, along with 23 acres within Coastal Regulation Zone (CRZ) area that will be utilized as corridor for sea water pipeline and for coal conveying at a total cost of USD 27.5m.

There will also be a requirement for the installation of electrostatic precipitators (ESPs) and flue gahis weeks desulfurization (FGD) systems however these will be decided based on the fuel supply agreement signed.

“If required, we will invite separate bids for the construction of the FGD plant,” said Paul.

 

This week’s featured opportunity is just one example of thousands of projects, deals and opportunities IIICorp is reporting on before anyone else. Our model of early-stage actionable intelligence means our subscribers have access to the deal flow before it hits the public tender. Visit http://www.iiicorp.com for more information on our solution for your company or financial institution.

Upcoming ICorp Events and Conferences

The ICorp team have been on the road recently, from Singapore, to Miami, to Rome, to Philadelphia. Our founder and CEO, Charlie Welsh, had the opportunity to speak as a panelist at the Association of Trade & Forfaiting in the Americas annual gathering (pictured below). We also recently attended the Special Libraries Association Conference and TXF Conference at the Four Seasons Rome. These have provided valuable forums  for sharing insight with our peers and colleagues. We’re proud to have the opportunity to showcase our product, the world’s first foreign industrial equipment supplier funding origination platform.

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ICorp will be attending and exhibiting at several conferences, expos and events in the coming weeks, so please be sure to visit our blog, homepage and Linkedin page for regular updates.

In the next month, find us at:

June 23-26      American Library Association Conference – Orlando, Florida

July 13-15         Business Librarians Association Conference – London, UK

July 16-19        American Association of Law Libraries Annual Conference – Chicago, Illinois

Are you attending or exhibiting at any of these? Be sure to connect with us on Linkedin or send us your details via our webform.

 

 

IIICorp sponsors ABLD-APBSLG-EBSLG Conference in Singapore

IIICorp is a premium business intelligence product for industrial manufacturers, technology providers and trade finance, but it is also an exceptional resource for academic research. Our Global Sales Director, Greg Greenberg (pictured) is representing IIICorp at the Conference of members of ABLD (Academic Business Library Directors), APBSLG (Asia Pacific Business School Librarians’ Group) and EBSLG (European Business Schools Librarians’ Group) in Singapore. IIICorp is proud to sponsor this event, taking place over the next two days.

IIICorp Global Sales Director Greg Greenberg, with representatives from Oxford Said Business School and INSEAD Asia

IIICorp Global Sales Director Greg Greenberg, with representatives from Oxford Said Business School and INSEAD Asia

To successfully emulate winning strategies, students in the most competitive business programs need access to clear, actionable intelligence before it becomes public knowledge. By using IIICorp as an academic research tool, students are able to fill the gap left by traditional databases, enabling them to make real business decisions in real time.

We have received overwhelmingly positive feedback from our customers already using IIICorp for academic purposes, whose students have access to our proprietary content, contact list, analytics and global team of industry experts.

To learn more about IIICorp and request a trial for your academic institution, visit our website.

Exclusive to IIICorp: Japanese firm IBIDEN Co Ltd shows interest in BHEL’s emissions contract

ibidenTokyo-based IBIDEN Co Ltd is among several companies, including Chinese firms, that have submitted their expressions of interest (EOI) to state-owned Bharat Heavy Electricals Limited (BHEL) for a proposal to design and engineer the latter’s emission control systems for power plants and its integration with the boilers on a project-to-project basis. A BHEL official also told IIICORP that the EOI is applicable to all BHEL power plants across the country. According to its website, the power major has 20,000 MW installed capacity and going by IIICORP metrics, the contract could be worth upwards of USD 400m. The EOI comes in the wake of recent emission norms laid down by the Indian Ministry of Environment, Forests and Climate Change (MoEFCC).

IBIDEN Porzellanfabrik Frauenthal GmbH, a subsidiary firm majority owned by IBIDEN Co Ltd, manufactures the CERAM brand of catalyst and industrial honeycombs at its facility in Frauental, Austria. CERAM has developed into a global supplier of catalysts and industrial ceramics and currently has customers in more than 40 countries with over 400 employees. In the course of its international expansion, the company has set up subsidiaries in the United States and South Korea. The introduction of progressive environmental legislation around the world is a key driver of the CERAM´s business activities, says its website. The company’s environmental management system ensures responsible use of natural resources and systematically reduce its wastewater, solid waste streams, and atmospheric emissions.

IIICorp subscribers have access to actionable intelligence before it becomes public. Visit our website to register for a free trial for your company.

Featured Story of the Week: SGCC bid for Abengoa’s Brazilian assets faces delays arising from deal’s complex, politically-sensitive nature

State Grid Corporation of China’s (SGCC) planned purchase of Abengoa SA’s Brazilian power transmission operations is facing ongoing delays as a result of the high level of complexity it has encountered in the asset evaluation process. That’s according to Xiao Bin (肖斌), an official at theState Grid Brazil Holding SA (国家电网巴西控股公司), the local subsidiary of SGCC, who made reference to the highly diverse nature of the assets in question and their complicated financial position.

“The acquisition is still in talks and there is n0_1_21st_Century_Silk_Road_Map_thumb_1460933781855o certain time for how long it will take,” Xiao said. He added that a formal proposal has yet to be made.

SGCC’s confusion is shared by industry analysts who have also had difficulty estimating the value of Abengoa’s Brazilian assets, which comprises facilities that are operational and reneue-generating as well as ones that are being developed. In the latter category, Abengoa has about 6,000km of transmission lines under construction that will require the purchaser to take on billions of dollars of future investments.

The Brazilian government has indicated that it would expect a large and well-capitalized entity like SGCC to acquire all of Abengoa’s Brazilian assets as a package.

This news service previously reported, citing a SGCC source, that this transaction was a politically sensitive one and that it should not be viewed as a simple sale and purchase agreement between two companies. The state-owned Chinese company, which has invested USD 2.58bn (CNY 16.83bn) in Brazil’s power transmission sector since 2010, believes that the expertise it has developed via the construction of China’s vast ultra-high-voltage projects over the past two years gave it a competitive advantage over rival bidders.

Financially-distressed Abengoa, which filed for bankruptcy protection in November 2015, is Brazil’s largest non-state owned power transmission operator. Its Brazilian operations have total net debts of USD 825m (CNY 5.4bn), of which more than USD 218m (CNY ) are owed to local equipment suppliers in the country, according to the electricity industry association Abinee.

For similar stories and access to early-stage actionable intelligence on projects happening in the energy, water and waste, and environmental sectors in emerging markets, contact us at https://www.iiicorp.com/ContactUs/?ContactUs