Blackstone India has acquired gems testing and certification firm International Gemological Institute from Shanghai Yuyuan Tourist Mart (Group) Co, a subsidiary of Fosun and founding family member Roland Lorie.
The total enterprise value of the deal is $535 million. With zero debt and net cash of $35 million, the transaction values the company at $570 million. Blackstone acquired an 80 per cent stake from Fosun and the remaining stake from the founding family.
IGI has a significant presence in India, where it gets a major share of its revenue and profits. It operates 18 gemology labs in the country out of the 20 laboratories worldwide. It has a significant presence in the certification of natural diamonds and jewellery sold in the Indian retail market and the certification of lab-grown diamonds made in India for sale to the US retail market. The global lab-grown diamonds retail market is worth $7 billion, growing at an annual 15 per cent from 2019 to 2022. The global natural diamond jewellery retail sales are at about $80 billion. Around 90 per cent of rough diamonds are polished in India.
Commenting on the deal, Mukesh Mehta, Senior Managing Director in Blackstone Private Equity Group, said that IGI had spearheaded the certification of gems and the private equity firm was bringing its best into the business, including operational expertise, technological capability “and global track record in building successful businesses to help the company expand its global footprint.”
Lorie said that the founders were happy to entrust Blackstone with the task of taking IGI to its next stage of development. “Under the patronage of Blackstone, we intend to get even closer to the consumer and to grow the business exponentially,” he added.
Fosun co-chief investment officer, Kevin Shikun, said that the company was expecting a positive impact on its financials through the sale of stakes and “further focusing of resources on the company’s key strategies and projects.”
Blackstone manages assets worth $50 billion in India.