TPG Capital has agreed to invest approximately $113 million in Union Bank of Colombo through a combination of primary and secondary shares, representing up to 70% of UBC's issued share capital. The biggest buyout ever seen in Sri Lanka, the deal also includes warrants that, if exercised in full within their six-year term, would increase TPG's interest to 75%. With a branch network of 60 locations covering Sri Lanka, UBC focuses on small and medium enterprises, offering a wide portfolio of financial products and services.
There has been a steady flow of investments in financial institutions across Asia and Africa this year, with deals on pace to surpass the 2013 total of 19, according to the PitchBook Platform. It's interesting to note that of the 34 transactions in the sector the past two years, almost 60% involved organizations from Sri Lanka's next-door neighbor, India. Ratnakar Bank, which is reportedly looking to go public early next year, has been a particularly popular target, claiming three rounds of growth funding totaling about $175 million (INR10.6 billion) since April 2013.
TPG has been one of the more consistent investors in this specific sector, overall, with 11 deals completed since 2007's start. Only Incofin (13) has made more. For a full list of investments in the financial institutions serving the developing markets in Africa and Asia, along with associated investors and other information, click here.
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