Buyer: Garnett & Helfrich Capital
Industry: Mobile phone platforms
Terms: Undisclosed, but Garnett & Helfrich invested $30 million in equity
Financial Advisors: None
Law firm: Buyer: Wilson Sonsini Goodrich & Rosati; Seller: Orrick, Herrington & Sutcliffe
Celunite is a provider of Linux-based open mobile platforms designed to capitalize on the convergence of cellular and broadband technologies. Garnett & Helfrich Co-founder David Helfrich says he wants to fatten up Celunite via a roll-up, closing up to five deals within the next year, mostly in India. Two of the deals it hopes to close this year.
The firm invested $30 million in equity 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,” says Helfrich. He adds, “To imagine India being purely a place where you’d outsource a call center is really false.”
Two-year-old Garnett & Helfrich specializes in taking control stakes in orphaned divisions of large corporations, then growing them with a venture-type hands-on process it calls a venture buyout. Since the divisions that Garnett & Helfrich buys often lack senior managers, the firm has to manage them itself or find new managers.
The venture buyout structure is one the firm believes is exportable to India, although the region is known more for its early-stage investing than for mature LBO opportunities. Indeed, several buyout firms that have set up offices there have been content to access the market by doing growth-stage deals.
Garnett & Helfrich has already logged miles in India. 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 of this year, Mark Barrenechea joined the firm, after stints managing Indian operations for Computer Associates and Oracle Corp.
The Celunite acquisition is the firm’s fifth out of its $350 million debut
No longer limited to its Silicon Valley headquarters in San Mateo, Calif., 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.—M.C.