Lighthouse recently part-exited its investment in Dhanuka Agritech.

Mid-market private equity firm Lighthouse Funds plans to invest in Saharanpur (Uttar Pradesh)-based Indian Herbs Specialities Pvt Ltd, which is engaged in research and manufacturing of herbal animal health care products, in its second deal this year.

The PE firm intends to invest through a mix of primary issue of shares and purchase of stake from the company's promoters, as per its filing to the Foreign Investment Promotion Board, the nodal body clearing foreign investment proposals in India. Although, the deal value could not be ascertained, bulk of the money (four-fifths) will go to the promoters, it is learnt.

Emails sent to spokespersons of Lighthouse and Indian Herbs Specialities did not elicit any response.

Incorporated in 1951, Indian Herbs Specialities manufactures herbal animal health care products for ruminants, poultry, pigs, equines, pets, aqua, etc. It has more than 22 patents in the US, Europe, Australia etc and many patents are pending in the US and other countries for research on its herbal products, as per its website.

Set up in the US in 2001 by Mukund Krishnaswamy (former executive of Lehman Brothers’ private equity team) and W Sean Sovak, Lighthouse has been investing in India since 2006.

It also counts Boris Siperstein and Sachin Bhartiya as partners, and has Brian Larcombe (former global CEO of UK-based and LSE-listed private equity fund 3i Group) besides Barbara Vogelstein (former partner at Warburg Pincus and Apax Partners) as advisors.

Lighthouse Funds had raised its maiden fund 'India 2020 Limited' in 2008 with a corpus of $100 million. Dhanuka Agritech, a public-listed firm involved in the business of agro-chemicals and seeds that Lighthouse part-exited part-exited recently, is one of its portfolio firms from this fund. It has also exited its investment in facility management services firm Radiant Hospitality and content localisation and media digitisation firm Words Infocom from the maiden fund.

Its second fund got $42 million commitment from US government's development finance institution Overseas Private Investment Corporation (OPIC) late last year. This fund is targeting to raise $150 million to invest in mid-sized Indian companies. It had made its first close in 2013 at a little over $60 million with commitment from IFC. It is yet to announce a final close. The proposed investment in Indian Herbs Specialities is through this fund.

The PE firm’s portfolio companies include iDiscoveri Education, Innoventive Industries, Imperial Spirits, Unibic India, Bikaji Foods, Shaily Engineering Plastics, Concept Hospitality, Miles Software and diagnostics chain Suraksha.

(As published in VC Circle on Wednesday, September 2, 2015)