KKR acquires 60% stake in Ramky Enviro Engineers

Global PE major KKR has entered into an agreement to acquire a 60-per cent stake in Hyderabad-based environmental engineering firm Ramky Enviro Engineers Ltd (REEL) for about $530 million (nearly Rs3,500 crore), valuing the Hyderabad-based the firm at about $925 million.
Apart from being the first PE buyout for KKR in India’s environmental services sector, this is also one of KKR’s largest buyouts in the country. KKR has made the investment from its Asian Fund III, a $9.3-billion fund that was raised last year.
REEL is an environmental and waste management solutions provider, with the company into processing of hazardous, biomedical and e-waste. It is also into recycling of paper, plastic and chemicals.
“With KKR as our new partner, we look forward to advancing our mission of responsibly addressing the environmental issues that emerging economies including India are facing today,” REEL managing director & CEO M Goutham Reddy said.
Barclays and EY were M&A advisors to REEL and KKR, respectively.
REEL has a presence in more than 60 locations across 20 Indian states, and certain Southeast Asian, Middle Eastern and African markets.
Cyril Amarchand Mangaldas and Simpson Thacher & Bartlett were the KKR’s legal counsel, while Deloitte India was the accounting and tax advisor. Environmental Resources Management serves as environmental management advisor to the deal.
“REEL’s work uniquely supports the Swachh Bharat Mission, and our team is pleased to invest in the growth of a company that provides critical services and infrastructure to reduce pollution and address the needs of India’s expanding urban population,” Sanjay Nayar, Member & CEO of KKR India, said.
KKR – which has been investing in India since 2006 – has a  portfolio ranging from Cafe Coffee Day, Bharti Infratel, Avendus Capital, Radiant Life Care and SBI Life Insurance among others.
“We look forward to leveraging our resources to enhance REEL’s operational best practices and add value by focusing on engineering innovation, attracting managerial talent and boosting efficiency, in addition to building on REEL’S rigorous focus on environmental, health and safety initiatives. We will work alongside REEL’s experienced management team to enhance the company’s mission of becoming a world-class leader in environmental management at a time when implementing sustainable solutions is more important than ever,” added Rupen Jhaveri, Managing Director at KKR.