PE firms invest $950-m in IT during Q1

Priya Padmanabhan






BANGALORE: Private equity firms invested $950 million in 14 deals in the IT/ITES
sector in Q2 this year.






The major chunk of the investment-around $900 million was invested by Kohlberg
Kravis Roberts, which picked up 85 per cent stake in



Flextronics Software.






The other top companies that raised PE investment included


Geometric Software ($10 million from ICICI Ventures); Chennai-based HR

outfit



Secova ($8 million from IIML) and



BillDesk, which raised $8 million from Clearstone Ventures and SIDBI






Chennai-based reseach agency focused on PE in India, said in its recent Venture
Intelligence report that Private Equity firms invested about $2.1 billion across

76 deals during the quarter ended June 2006, across major industry sectors. The

amount invested during the latest quarter was five times higher than that during

the same period last year (which witnessed 40 deals totaling $407 million) and

1.5 times that during the January-March 2006 quarter (which had witnessed 69

investments worth $1,384 million).






With 17 deals worth about $200 million, manufacturing overtook the Information
Technology & IT-Enabled Services (IT & ITES) sector as the favorite industry

among private equity (PE) investors during the latest quarter in India.






“While PE interest in manufacturing grew rapidly right through 2005, this is the
first quarter in which investments in this industry has actually overtaken the

number of deals in IT,” said Arun Natarajan, founder, Venture Intelligence

India.






Engineering and construction companies emerged as the third most favorite
industry attracting $372 million across thirteen deals.






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