Darby backs Indian coffee company

Investments in consumer-related industries in India continue to soar as the private equity arm of Franklin Templeton Investments takes a stake Amalgamated Bean Coffee Trading Company.

Emerging markets investor Darby Overseas Investments has invested $25 million in Bangalore-based Amalgamated Bean Coffee Trading Company, to take a minority stake.

Amalgamated Bean Coffee Trading Company, better known as Coffee Day, is a coffee conglomerate involved in coffee procurement, processing and retailing. It exports coffee to Europe, Japan and the US. It also owns and manages India’s largest retail café chain under the brand Café Coffee Day. There are 552 Café Coffee Day outlets in 90 cities in India, and one in Vienna, Austria.

The investment will be used by Coffee Day to further expand its reach in India, and in Europe.

Richard Frank, chief executive of Darby Overseas Investments, said in a statement that Coffee Day is “positioned to take further advantage of the ongoing macroeconomic, demographic and lifestyle changes” in India.

Deepa Sankaran, principal at Darby Asia Investments, told PEO that Coffee Day is in the consumer lifestyle sector which is the “right industry”.

This is the eighth investment made out of Darby Asia Mezzanine Fund II, and its third in India. Sankaran said that the fund’s previous deals in India include investments in Bhoruka Power Corporation, a company engaged in the construction of wind power and small hydroelectric projects; and Escorts Construction Equipment, a manufacturer of heavy construction and material handling equipment.

Darby Asia Mezzanine Fund II is a $300 million fund that invests across Asia with a focus on China, India and South Korea. It does not have a sector focus and invests on an opportunistic basis.

The firm has also boosted its team in Eastern Europe and hired Sean Glodek as senior vice president for its Warsaw office. Glodek was earlier at Lehman Brothers, where he was a vice president of the global mergers and acquisitions team. In his new role, Glodek will be responsible for investing out of Darby Converging Europe Mezzanine, a €248 million fund.

Darby manages assets of about $2.2 billion.