Mizuho Securities Co, a consolidated subsidiary of Mizuho Financial Group, has entered into an agreement with KKR, the majority shareholder of Avendus Capital, to acquire over 60 per cent of the shares of Avendus for up to 81 billion yen ($524 million), according to the Japanese financial services group.
The securities arm of Japan’s third largest banking group will be buying between 61.6 per cent and 78.3 per cent in Avendus, making it a consolidated subsidiary post the acquisition. In a separate statement, Avendus said its Co-founder and Executive Vice-Chairman, Ranu Vohra, will also be divesting his shareholding.
Avendus will continue to be led by founders Gaurav Deepak and Kaushal Aggarwal, along with the firm’s existing leadership team, ensuring continuity of vision and strategic direction as the firm enters its next phase of growth, it said. The firm will retain its brand and identity, while gaining strategic access to Mizuho’s scale, institutional network and global reach.
Vohra, who had co-founded Avendus in 1999, said that after “26 incredible years” of building Avendus he was stepping away with “pride and gratitude”.
KKR exit
KKR, which had first invested in Avendus in 2016, has been working on this exit for over two years now. The transaction has been delayed due to disagreement over valuations, amongst the shareholders and prospective buyers.
There are two other major investors such as Gaja Capital, and entrepreneur Yogesh Mahansaria, who had invested in Avendus in 2017. Sources indicated that Gaja Capital’s exit will be through a tag-along process. The tag price offered to Vora is ₹11,500 crore, and Gaja is understood to be awaiting clarity on its tag price.
Gaja Capital did not respond to an email sent seeking clarity.
Mizuho Financial Group serves over 20 million retail clients and approximately 80 per cent of the listed companies in Japan through a well established domestic network. Globally it employs 65,000 people and has total assets of around US$2 trillion.
“Avendus has been walking side by side with the entrepreneurs supporting India’s rise, and it makes us very happy to be able to welcome them as one of our key partners,’ said Masahiro Kihara, President and Group CEO, Mizuho Financial Group, adding, “With them, we aim to evolve into a truly global financial institution that creates new value by bridging diverse cultures beyond national and regional boundaries.”