By Stephen Aldred and Indulal PM
MUMBAI/HONG KONG, April 12 U.S. buyouts firm KKR
& Co L.P. has agreed to buy a controlling stake in India's
Alliance Tire Group from Warburg Pincus LLC, the three
companies said on Friday, without disclosing details of the
The deal would be the biggest private equity transaction in
India after Bain Capital paid about $1 billion to buy a 30
percent stake in business process and technology services
provider Genpact in August 2012.
Reuters reported on Tuesday, citing sources with direct
knowledge, that KKR would pay around $500 million for the
controlling stake from Warburg, which invested in the tyre maker
Alliance in 2007.
The U.S. private equity firm will put in slightly over $300
million of its own money to buy an over 75 percent stake in
Alliance, a source familiar with the matter told Reuters on
Alliance Tire will be the last new investment from KKR's
debut Asia fund, a $4 billion fund raised in 2007. The firm is
near to a final close on a new $6 billion Asia fund, the largest
ever buyouts fund raised for the region.
KKR's capital markets team put together the financing
package for the deal, the source said, which included financing
from Crescent Mezzanine and Ivy High Income Fund.
Alliance owns two manufacturing plants, one each in Israel
and India, and has a sales presence in more than 120 countries,
according to its website. Alliance's tyres are also made at
contract manufacturing facilities in China and Taiwan.
The group had sales of more than $500 million in 2012.
Warburg Pincus, which invested over $3 billion in India,
will be exiting its 6-year-old investment in the company.
Yogesh Mahansaria, founder of ATG, will continue to maintain
a stake in the company and partner with KKR to continue to grow
the business, the statement said.
Credit Suisse advised Alliance on the deal while Nine Rivers
Capital advised the founders. Barclays Capital and JPMorgan