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Summit completes first Asian deal

Boston-based Summit Partners has invested $30m in an Indian seed company in what is its maiden Asian investment.

Summit Partners, a global growth equity investor, has acquired a minority interest in India’s Krishidhan Seeds (KSL) for $30 million.

This is the firm’s first direct investment in Asia, Scott Collins, managing director of Summit Partners, told PEI Asia in an interview. The firm does have an exposure to Asia, but so far, it has been through investments in other companies that have exposure to Asia either through their operations or through acquisitions, he said.

“We’ve had a long-term objective of being active as direct investors in India,” Collins said. The firm also has a parallel effort focused mainly on China and a few other East Asian economies, he added.

KSL develops, produces and distributes proprietary hybrid seeds and selections for Indian farmers. The company reported consolidated revenues of about $61 million for the year ended September 2009 and is on track to generate returns of more than $88 million in the current financial year. It has a portfolio of more than 120 products in field crops, vegetable seeds and crop nutrition categories.

Summit Partners had indentified several elements of agriculture in India as being of high growth potential, including seeds, Collins said. “We also believe that the company’s high dedication to research is important. The business has a full product range across a variety of different crops and different geographies within India – so it is a well-diversified business that is also growing rapidly,” he added.

The investment will be used for research and development, technology and product-related acquisitions, international expansion and company infrastructure, the firm said.

“Summit Partners sees a significant opportunity in the Indian market. India’s strong entrepreneurial tradition, combined with a fast-growing economy, means there are many companies that can benefit from Summit’s capital investment, strategic advice and industry expertise,” Collins said.

Amit Chaturvedy, vice president of Summit Partners, will become a director on KSL’s board effective immediately, and Vinay Kashyap, a senior associate, will become a board observer.

Established in 1984, Summit Partners is a growth equity investor providing private equity and venture capital to growing companies. Since inception, the firm has raised more than $11 billion and has invested in more than 300 companies globally.

Summit is currently investing from the $3.1 billion Summit Private Equity Fund VII, the €1 billion Summit Partners Europe Fund, an $880 million subordinated fund and a venture capital fund with just over $300 million in commitments.