The tech-focused private equity firm Garnett & Helfrich Capital has acquired mobile phone company Celunite, which has most of its operations in India. This is the firm’s latest move in India, where it plans to open an office early next year.
Celunite provides Linux-based open mobile platforms designed to capitalize on the convergence of cellular and broadband technologies. Garnett & Helfrich co-founder David Helfrich says that he wants to fatten up Celunite via a roll-up, closing up to five deals within the next year, mostly in India. It hopes to close two of the deals this year.
The San Mateo, Calif.-based firm invested $30 million in Celunite, though other terms weren’t disclosed. It aims to grow revenue to $100 million over the next two years. “A lot of the leading technology for the mobile handset is being developed in India,” Helfrich says. “To imagine India being purely a place where you’d outsource a call center is really false.”
Garnett & Helfrich, which raised $350 million for a vintage 2004 fund, specializes in taking control stakes in orphaned divisions of large corporations, then growing them with a venture-type, hands-on process that it calls a venture buyout. The divisions that Garnett & Helfrich buys often lack senior managers.
The venture buyout structure is one that the firm believes is exportable to India, although the region is known more for its early stage investing than for mature LBO-like opportunities. Indeed, several buyout firms that have set up offices there have been content to access the market by doing only growth-stage deals.
Garnett & Helfrich has already logged miles in India, however. Portfolio companies with operations there include Wyse Technology, which makes low cost “thin” computers, and Ingres Corp., which is an open-source database company. In June, Mark Barrenechea joined the firm, after stints managing Indian operations for Computer Associates and Oracle Corp.
The Celunite acquisition is the firm’s fifth from its debut fund. Celunite maintains offices just down the road from Garnett & Helfrich in Sunnyvale, Calif., but most of the company’s empoloyees are located in development centers in Pune and Hyderabad, India. Garnett & Helfrich is also opening up shop in Mumbai, India, in the first quarter of next year. The firm will be looking to recruit local talent and leverage its existing contacts there to find new deals. —Mark Cecil