pratikkk

MP Guru
Kurzweil Educational Systems, Inc. is an American based company that specializes in providing reading and writing software to assist people who are blind or partially sighted, or who have learning disabilities, such as dyslexia and Attention Deficit Disorder. Founded in 1996, the company has pioneered the development of computerized assistive technology, and achieved worldwide recognition for its work. Kurzweil Educational Systems has also won several excellence awards within its industry. Its headquarters are based in Bedford, Massachusetts.
The company supplies two principal software products to its customers - Kurzweil 1000 and Kurzweil 3000. Kurzweil 1000 is a package which enables a visually impaired user to gain access to both electronic and printed material by speaking aloud text which has been scanned or copied; while Kurzweil 3000 is a tiered assistive reading, writing and learning medium aimed at students with learning disabilities or other disabilities that make reading or writing difficult.
Though the company was formed in 1996, text to speech software is actually something that dates back to the 1970s, when Dr Raymond Kurzweil developed his first Kurzweil Reading Machine, a device which could scan and speak text.
In 2005, Kurzweil Educational Systems was acquired by Cambium Learning Technologies. Cambium owns a number of other similarly related companies.

· Education: Highly attractive with an estimated $40 billion market for private institutions. Over
$300 million has been invested in Education ventures since 2006, and more than $800 million
investment is being planned over the next 12 months.
· Healthcare: Significant capabilities in India for clinical research. Low average number of
hospital beds will bring in massive investment to build more hospitals throughout the country.
Over $686 million investment has taken place during the last 18 months.
· Clean tech or renewable energy: Dire need for a more reliable power supply throughout the
country. Supportive regulations are providing a boost to clean tech/renewable energy. About
$3.5 billion PE investment is expected over the next few years.

The India PE market is dominated by non-India GPs, even though many large domestic GPs already
exist in the market. A key explanation for this phenomenon is the tax regulations, which make it
more conducive for GPs to be incorporated outside India. LPs consist of foreign players due to nonexistent
Indian endowment funds; Indian pension funds are not permitted to invest in private equity.
Indian high net worth investors, on the other hand, prefer to invest in their own businesses or real
estate. The Private Equity market in India has revealed a lot of potential but also in India, the
economic downturn has caused a sharp fall in total PE activities. 2008 saw a decrease of 44% in PE
deal value compared to 2007, while the first half figures for 2009 have not been encouraging as it
shows less than 10% deal value of the whole of 2007. Nonetheless, with slowdown in funding from
banks & IPOs, Private Equity is expected to remain a primary source of raising capitals in India (see
figure 2).
In general, drivers of private equity industry growth in India can be identified:
1) Sustained rapid economic growth averaging 7% - 8% annually since 2000.
2) Burgeoning domestic customer market with the middle class projected to grow from 50
million currently to 500 million in 2025.
3) Well-established public equity market consisting of over 6,000 companies listed on Mumbai
Stock Exchange with reasonable levels of liquidity and trading volume.
4) Human capital & competitiveness in high-growth sectors, with one of the best higher
education systems in the emerging market and widespread knowledge of English.
5) Stable democratic government & credible legal framework as its common-law legal origin
has provided the foundation for a well-established, credible legal system.

1) Need for assessment of more companies before making an investment
In general, it takes a lot more analysis to identify a suitable company for a PE investment in India
compared to the US.
One of the primary reasons for this phenomenon is the deal size, or rather the lack of it. Most of the
companies assessed by PE firms in India turn out to be too small for a meaningful investment and
provide few opportunities to scale up. Most of the investment opportunities assessed are also halted
halfway as the company promoters are only receptive towards a minority investment from a PE fund,
since these promoters prefer to maintain control of the company. In addition, sector-specific
reasons, such as over-regulation in Education, prevent an investment in many attractive companies.
2) Longer deal turnaround time
According to Raj Ayadurai of Navis Capital, a PE deal in India could easily take twice the time to
complete when compared to a deal in developed markets. A key reason for this is the need to
conduct a more thorough due diligence. The Indian due diligence process often includes a
comprehensive promoter background check, as stories abound of con-artists trying to sell their fake
shell companies, or serial entrepreneurs who repeatedly sold their run-down companies that appear
attractive due to doctored financials.
On this note, insufficient accounting records, or reliance on cash-based accounting rather than
accrual-based accounting, have prolonged many due diligence activities as PE funds often have to
rebuild the company reporting system to determine the viability and profitability of the target’s
business prior to making a significant investment in the company. PE funds also complain of the
lengthy duration taken by companies to respond to their request for information.
 
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