Alagappan Murugappan returns to ICICI Securities as head of equities

Alagappan Murugappan has re-joined ICICI Securities, the investment banking division of The ICICI Group as head of equities. Prior to this, he was with private equity firm Deeva Capital where he was a partner and returns to the ICICI fold after an overall three-year stint in private equity. Before he joined ICICI Securities, Murugappan was with Cazenove, heading its Indian operations; Cazenove was primarily into equities broking. Murugappan began his career with Cazenove in London after qualifying as a solicitor in England. He holds an LLM from Cambridge University.

Murugappan was one of the three founding partners of Deeva Capital and had spent one year at Deeva. Deeva Capital is a start-up private equity firm with about $100 mn secured from international seed funding. Murugappan had left ICICI Securities in early 2004 to pursue a career in the private equity business. Then, Murugappan had joined Actis as an investment principal and was responsible for leading and coordinating fundraising activities relating to South Asia and for deal generation in India. Murugappan quit Actis to form Deeva in early 2006.

Read more in the article in AsianInvestor.net.

Firstsource Solutions, 24/7 Customer to merge

India’s fifth-largest BPO Firstsource Solutions (formerly ICICI OneSource) and 24/7 Customer, the tenth-largest, are planning to merge themselves in a move which would usher in a whole new era of consolidation in the Indian BPO / ITeS industry.

It is reported that Sequoia Capital is behind this action, which has substantial stakes in both companies. An array of strategic investments has been made in Firstsource by Sequoia, Temasek, Metavante and ICICI. In June 2003, Sequoia had led the $22 mn funding in 24/7 Customer. Firstsource employs over 10,717 people; 24/7 has 5500 people on its rolls.

Read the article in DNA Money.

Rain Commodities to buy Canadian carbon company for Rs. 1624 crores

Rain Commodities Limited is carrying out a leveraged buyout of Carbon Canada, Inc. for Rs. 1624 crores (Canadian $437 mn). Toronto-based Carbon Canada is a subsidiary of Great Lakes Carbon Income Fund (GLC Carbon). The acquisition would also include a 73.56% stake in GLC Carbon and certain unsecured subordinated notes of Huron Carbon ULC, a wholly-owned subsidiary of GLC Carbon.

Post-acquisition, Rain Commodities’ stake in GLC Carbon will scale up to 94% from the current 20.23%. Rain Commodities bought this stake from American Industrial Partners Capital Fund in 2006. Rain Commodities will also purchase the remaining stake in GLC Carbon from its management and other investors. Rain Commodities will conduct the transaction through its US-based wholly-owned subsidiary Rain Commodities US. The EV of the transaction is approximately Rs. 2513 crores (Canadian $767 mn). The transaction is expected to be close by June.

Citigroup Corporate and Investment Banking is advising Rain Commodities US on the transaction. Rain Commodities has secured bank financing from the ICICI Group and Citigroup to fund the proposed acquisition.

Great Lakes Carbon Income Fund is a trust established to hold indirectly the securities of GLC Carbon USA. The fund is listed on the Toronto Stock Exchange, Canada. GLC Carbon is the world’s largest producer of calcined petroleum coke (CPC) with annual production capacity of 2.3 mn tonnes a year.

Read the articles in The Economic Times and Business Standard.

Oracle, PE firms eye stake in 3i Infotech

Indian software products and services firm 3i Infotech is reportedly under the radar of Oracle and some other private equity funds. Currently, the ICICI Group holds a little over 48% in the firm. 3i Infotech is mainly dominant in the in the financial services and enterprise resource planning (ERP) space, apart from services.

The ICICI Group is reportedly keen on reducing its stake in 3i Infotech and that it has been in talks with private equity players. US software giant Oracle is also doing the rounds of being interested in a stake in 3i Infotech.

The ICICI group has been scouting for suitable buyers since the last few months. Its stake is held through two group companies, ICICI Bank and ICICI Strategic Investments Fund. Reserve Bank of India has asked all banks to progressively reduce their stakes in non-finance group companies. The group’s stake has already come down marginally from 54% to 48% from March 2006 to September 2006.

Last year, 3i also acquired a Hyderabad-based firm, which gave it a presence in the growing anti-money laundering solutions space. Its flagship insurance product, PREMIA, also integrates with Oracle e-business suite and as recently as December 2006, it set up a centre of excellence for insurance in Chennai in partnership with Oracle. In this context, the acquisition makes strategic sense to Oracle.

3i has been delivering impressive numbers in the past few quarters. For the September quarter, it reported a profit of Rs. 23.2 crores on revenues of Rs. 149 crores. In fiscal 2006, it recorded a profit after tax of Rs. 58 crores and revenues of Rs. 424 crores. 3i was originally set up as a 100% subsidiary of the ICICI Group as ICICI Infotech. Later, the company changed its name to 3i Infotech and also went public.

Read The Economic Times article.