By Stephen Aldred and Janeman Latul
HONG KONG/JAKARTA Oct 25 Carlyle Group
is making its first investment in Southeast Asia, buying a stake
of around 25 percent in a publicly traded Indonesian telecom
towers operator for about $100 million, sources with knowledge
of the deal said.
The investment in PT Solusi Tunas Pratama TBK (STP)
, Indonesia's fourth largest tower operator, underlines
a growing trend of global private equity funds setting their
sights on investing in Southeast Asia's biggest economy.
Indonesia's government has restrictions on foreign ownership
of tower assets, but sources said Carlyle was able to structure
the transaction so that it complied with the rules.
Carlyle declined to comment. STP did not respond to calls or
emails requesting comment. The sources declined to be identified
as details of the deal have not been publicly announced.
Washington D.C.-based Carlyle is one of the world's largest
private equity firms, with more than $150 billion under
management. The firm arrived in Asia in the late 1990s, focusing
its first wave of investments primarily in North Asia. For China
alone, Carlyle has 42 past and present portfolio companies
listed on its website.
The STP investment is not Carlyle's first effort at
investing in Southeast Asia, as the firm has scoped out deals in
the region before. Reuters and other media reported last year
that Carlyle took part in the auction to buy a minority stake in
Indonesian unlisted packaged food company GarudaFood Group.
Indonesia is a hot destination for deal making, evident from
the $10.1 billion that buyout firms are raising in
Indonesia-focused funds, according to estimates from industry
data compiler Preqin.
STP, which has a market value of $360 million, was founded
in 2006. It has 1,322 towers, most of which are in and around
Jakarta, according to the company's website.
Carlyle is in the process of raising a $3.5 billion fund
that will be its fourth for the region, sources have previously
told Reuters. The third fund, closed in 2010, was $2.55 billion.
For Carlyle, striking a deal in Indonesia shows current and
potential investors that the firm is broadening its portfolio
Southeast Asia is enjoying a fundraising boom as global
equity firms are tempted by its fast-growing economy and
potential for further expansion. Indonesia, with a rising middle
class that is spending more and more money, has become a
particular focus for private equity.
Carlyle rivals such as Bain Capital, Blackstone and
KKR & Co LP are also pouring money and resources into
the region, and lining up bids for auctions, like the sale of an
up to $300 million stake in Indonesian private healthcare
News of the STP investment comes as Henry Kravis, co-founder
of KKR and a pioneer of private equity investing, arrives in
Singapore to open the firm's first Southeast Asia office, where
it will base a deals team to more closely cover the region.
When it comes to deal-making, Indonesia is a textbook case
of high risk, high reward.
Any money allocated to Indonesia can be subject to wild
swings in the local stock market and to unpredictable rule
changes. Corruption remains a serious hurdle for foreign
investments. But the payouts can be worth the headaches.
CVC has been in discussions on a possible sale of PT
Matahari Department Store, seeking a price of more
than $2 billion after paying less than half that amount for the
company two-and-a-half years ago.
TPG has seen the value of its $195 million investment for 72
percent of local bank PT Bank Tabungan Pensiunan TPK
grow to $2.2 billion since 2008, though the stake is locked up