Aureos Capital’s South Asia Fund has acquired a 25 percent stake in Sri Lankan conglomerate Sunshine Group for $4.75 million (€3.2 million). The $122 million fund has also acquired a 5 percent stake in one of the group’s unit businesses, Watawala Plantations, for $900,000.
Sunshine is a Colombo Stock Exchange-listed holding company whose principal businesses include plantations, teas, distribution of pharmaceutical products and metal packaging solutions for food and beverages. The company posted revenues of $68 million in the latest fiscal year ended March 2008 and profits of $1.9 million, according to a statement.
Watawala is majority owned and managed by a Sunshine joint venture with India’s Tata Group, and is a diversified plantation business focused on the retail and export of branded teas. For the fiscal year ended March 2007, Watawala posted a net profit of $3.8 million.
Though small by Western standards, the investment marks a significant transaction in a country that is still largely unchartered territory for private equity capital. Aureos’ growth investment in these companies was executed as a private placement of shares.
It’s not out of the ordinary, however, for Aureos, which specialises in providing expansion and buyout capital to mid-cap business in emerging economies across Asia, Africa and Latin America. Established in 2001 to take over management of a portfolio of 14 CDC Group funds, Aureos has more than $122 million of committed capital in its South Asia fund, which is focused on investments in Sri Lanka, India and Bangladesh.
Additionally, Aureos is in the process of raising a $400 million Africa fund, as well as a $300 million Latin America Fund. The Latin America Fund, which in January of this year held its first close on $140 million, recently funded Aureos Capital’s acquisition of a majority stake in Mexican transportation leasing company Analistas de Recursos Globales for $5 million.