Under the agreed terms, KKR will initially buy a 60% stake in the Indian homegrown investment bank, with a strategy to buy an additional 10% in the next 12 months.
Avendus’ founders Ranu Vohra, Gaurav Deepak and Kaushal Aggarwa will jointly own a 22% stake in the bank, while the remaining 8% will be held by a US-based investor Anil Godhwani and the senior management.
As part of the deal, KKR will invest about $70m in the company and will pay around $35m to exiting stakeholders, The Economic Times reported.
Avendus Capital managing director Ranu Vohra was quoted by The Times of India as saying: "We are excited about this partnership and what it means for our clients, employees and the businesses we operate in.
"The opportunity in mid-market companies continues to be very attractive and Avendus aims to establish itself as a partner of choice for these companies and their owners."
Avendus’ revamped nine member board will headed by an eminent non-executive chairman and will be equally represented by independent directors, founders and KKR.
Avendus will develop credit solutions, which will work alongside the wealth management unit. It currently has $1bn worth of portfolio under wealth management.
In addition, KKR will reportedly invest around $50m to set up a non-banking finance company (NBFC) business that will focus on mid-market companies and their owners.
The proposed NBFC unit is expected to have a record of loans worth $250m in the next 3-5 years.
Image: KKR has signed a definitive agreement to acquire over 70% stake in Avendus Capital. Photo: courtesy of adamr / FreeDigitalPhotos.net.
