TVS Shriram Growth Fund, a Chennai-based private equity fund managed by TVS Capital Fund, will pick up a ‘significant minority stake’ in Bangalore-based facility management company Dusters Hospitality Services Pvt. Ltd.
The money will flow into a bloated entity in the wake of an impending merger of Mumbai-based Total Solutions Facility Management Private Ltd. with Dusters Hospitality.
Dusters and Total Solutions are currently run independently by first-generation entrepreneur-brothers Shamsher Puri and Jasmer Puri, respectively. The merger would help them aspire to be among a top player in the facility management field, the brothers felt. This required growth fund and, hence, they had inducted private equity into the enlarged Dusters.
Access to growth capital and management bandwidth would help Dusters to scale up both organically and inorganically. TVS Capital Fund has committed to infuse Rs. 35 crore into Dusters in two tranches.
This investment comes close on the heels of the Fund investing Rs. 65 crore into book retail chain Landmark.
At the current hit rate, the turnover of the combined entity of Dusters is projected at around Rs. 110 crore.
TVS Capital would bring in Rs. 25 crore in the first phase. This would take the combined investment (including that of Puris) in the ventures to Rs. 68 crore, according to D. Sundaram, Vice-Chairman and Managing Director of TVS Capital Fund.
This would fetch a 37 per cent equity stake for TVS Capital. Post-merger, Dusters would target a turnover of Rs. 300-350 crore in three years. Two nominees of TVS Capital Fund would join the board of Dusters, Mr. Sundaram said. Of the Rs. 600 crore corpus, TVS Capital had already drawn down 40 per cent and out of this, 50 per cent had been invested, he added.