CVC in talks to buy KKR’s Avendus stake after Mizuho deal falters

For Mizuho, buying into Avendus would have strengthened its presence in India, a hot market for Japanese banks because of rising demand for investment banking and financing solutions.

CVC Capital Partners Plc has entered the race to acquire KKR & Co.’s majority stake in Avendus Capital Pvt. after Mizuho Financial Group Inc.’s attempts to buy out the Mumbai-based company stalled, according to people familiar with the matter.

The Luxembourg-based alternative asset manager is assessing Avendus’s operations and financials, and deal talks are at an early stage, the people said, requesting anonymity as the information is private. CVC could still walk away, while KKR — which owns about 63% of the company — may consider other suitors, including Mizuho, they said.

A sale would mark one of the larger private equity exits in India’s financial services sector, signaling strong investor appetite for the country’s fast-growing capital markets and wealth management industry. For Avendus, a new backer with global reach could provide fresh momentum as it looks for a bigger share of advisory and asset management mandates in a fiercely competitive market.

A spokesperson for KKR declined to comment while CVC’s representative didn’t respond to requests for comment.

KKR’s discussions with Mizuho have faltered in recent months, Bloomberg News reported earlier this month, after one of Avendus’s minority shareholders sought a higher valuation. The Japanese lender had been close to finalizing a deal to buy out Avendus in a transaction that valued the business at about $800 million.

New York-based KKR first bought into Avendus in 2015 and injected additional capital two years later. Since then, Avendus has expanded beyond investment banking into wealth management, lending and equity capital markets.

The Avendus management, led by Gaurav Deepak, retains influence over any potential deal, given its role in driving business lines and growth strategy. Other parties that have previously expressed interest include Nomura Holdings Inc. and The Carlyle Group Inc., Bloomberg News had reported.

CVC, one of Europe’s largest private equity firms, has been expanding its footprint in Asia through deals spanning financial services, technology and consumer sectors. For Mizuho, buying into Avendus would have strengthened its presence in India, a hot market for Japanese banks because of rising demand for investment banking and financing solutions.