PE Fund Everstone to quit VLCC

MUMBAI, India - Jan. 27, 2015 - PRLog -- Having raked in moolah during an approx 4 to 5 yrs cycle, many Private Equity players exit, only to re-enter new and upcoming companies to repeat the time tested success story all over again. Private equity firm Everstone Capital is no exception. The company intends selling its 15% stake in VLCC Healthcare Ltd and has asked investment bank Equirus Capital Pvt. Ltd to find buyers, two people aware of the development said, requesting anonymity  as per reports from Livemint. The transaction could be worth a couple of hundred crores, one of them said. Everstone bought its stake in VLCC, which runs slimming centres, for Rs.50 crore in 2007. The New Delhi based company posted a revenue of Rs.700 crores and operating profit of Rs.100 crore for the year 2012-13, according to VCCircle, which provides investment information.

A private equity firm eyeing the Indian slimming and wellness sector typically likes to enter a firm with an equity anywhere between 20 to 50 crores and exits normally after 4-5 years, multiplying its wealth several times. Firms such as VLCC have gone the full cycle and thus the Investors with stakes of 10 to 20% expressing intent to leave. In similar sector, Belita Retail Pvt. Ltd recently raised funding from an angel investor. Also In October, Godrej Consumer Products Ltd entered the barber shop segment by acquiring a 30% stake in Mumbai-based firm for an undisclosed amount. New Delhi based Health Sanctuary is also in talks with private investors and PE / HNI Funds to raise capital for its all India expansion. Per industry sources, Health Sanctuary has the unique advantage of running all its centres on the Company Owned and Company Operated (COCO) model. The Company has a decade old presence in North India and is said to have planned to expand exponentially taking the tally to 70 centres across India and the gulf region in next 4 to 5 years. With a strong brand value and with celebrity Nutritionist Shubi Husain as its Founder and Managing Director, the company exuberates strong credentials.

The size of the so-called wellness industry in India is expected to grow to around Rs.1 trillion by 2015 at a compounded annual growth rate of 15-17%, from about Rs.70,000 crore in 2012, according to an August study conducted by industry lobby group Federation of Indian Chambers of Commerce and Industry (Ficci) and consulting firm PricewaterhouseCoopers. Experts are of the opinion that Weight Loss centres present an attractive investment opportunity as higher disposable incomes and greater awareness push women and men to spend more on grooming. Still, investments in the space have come in fits and starts, perhaps due to its fragmented state. In 2012, there were four transactions worth $3.7 million in the spa, grooming and wellness space, according to an estimate by VCCEdge, an investment tracker. There were no deals in this segment last year. In 2011, there were two transactions worth $30,000, while in 2010 there were seven worth $20.3 million. Some quick deals are on the cards in the year 2014.