UGRO Capital has completed the acquisition of Profectus Capital, it said on Monday. With the addition Rs 3,468-crore assets under management (AUM) from Profectus, UGRO’s consolidated AUM will rise to Rs 15,471 crore, a rise of 29%, according to a release.
As on September 30, the AUM of UGRO stood at Rs 12,226 crore, up 20% on year.
How does the acquisition strengthen the company’s fundamentals
“The acquisition materially strengthens the company’s fundamentals through an immediate Rs 150-crore annualised profit accretion, achieved with zero origination cost and delivered on Day 1,” the release said. UGRO’s net profit for the July-September period was up 22% on year to Rs 43 crore, according to the investor presentation.
The acquisition also gives an additional Rs 115 crore in operating synergies, expanding margins and an improvement of 60–70 basis points in the return on assets. The deal also opens a new Rs 2,000-crore medium-term opportunity in school financing.
Merger process
The company will soon initiate the merger process of Profectus into the parent company, subject to board and shareholder approvals. Both the companies will continue to operate independently until formal approval of the merger, the release said.
