Canadian asset manager Brookfield Asset Management has entered into an agreement to acquire IndoStar Capital Finance Ltd, an NBFC backed by private equity and real estate investor Everstone Group, for Rs 1,450 crore.

The deal would be structured through a combination of subscription to securities and purchase of shares from IndoStar Capital Mauritius and a mandatory tender offer. The investment remains subject to receipt of regulatory approvals and satisfaction of other closing conditions, the companies said in a statement.

Depending on the subscription to the mandatory tender offer, Brookfield – which will become a co-promoter of IndoStar - intends to acquire a 40 per cent stake in the NBFC and seek two board seats.

“We see opportunities to continue delivering substantial value to IndoStar’s customers, employees and investors. We have built a top-quality business in IndoStar and are excited for its next phase of growth,” said Dhanpal Jhaveri, Chairman, IndoStar, and Vice-Chairman, Everstone India.

The overall investment will comprise a combination of primary investment in equity shares and compulsorily convertible preference shares of Rs 1,225 crore along with a secondary purchase of shares from IndoStar Capital Mauritius.

R. Sridhar will continue to lead the company in his role as Vice Chairman and CEO, IndoStar, the statement said.

Retail business

The fresh investment by Brookfield will support the continued growth of IndoStar’s retail business, it added.

“We believe in the long-term secular growth runway of the Indian retail financial services sector. IndoStar has an experienced management team and a strong position in attractive and growing retail lending segments,” Aditya Joshi, Senior Vice President, Brookfield, said.

IndoStar Capital Mauritius continues to be the promoter and an active shareholder in IndoStar, which has Rs 10,600 crore of assets under management.

Nomura was the financial advisor. S&R Associates, AZB & Partners and Cyril Amarchand Mangaldas were legal counsels to Everstone, Brookfield and IndoStar, respectively.