GMM Pfaudler to acquire 54% stake in global business of parent

By: |
August 21, 2020 2:00 AM

The company will be acquiring the stake from the private equity firm Deutsche Beteiligungs AG Fund VI (DBAG).

After the acquisition, the combined entity will have a consolidated revenue of Rs 2,000 crore and earnings before interest, taxes, depreciation and amortisation (Ebitda) of approximately Rs 250 crore. After the acquisition, the combined entity will have a consolidated revenue of Rs 2,000 crore and earnings before interest, taxes, depreciation and amortisation (Ebitda) of approximately Rs 250 crore.

GMM Pfaudler, listed on Indian stock exchanges, announced on Thursday that it would acquire 54% in the global business of its parent, the Pfaudler Group, for a consideration of $27.4 million (about Rs 200 crore), funded through a mix of internal accruals and debt.

The company will be acquiring the stake from the private equity firm Deutsche Beteiligungs AG Fund VI (DBAG).

According to the agreements, GMM directly and through its subsidiary Mavag AG and the Patel family will acquire, a 54% and 26% equity stake, respectively, in the Pfaudler Group. DBAG will continue to retain the balance 20% stake.

After the acquisition, the combined entity will have a consolidated revenue of Rs 2,000 crore and earnings before interest, taxes, depreciation and amortisation (Ebitda) of approximately Rs 250 crore. The company will have 12 manufacturing facilities across eight countries and four continents employing around 1,500 in corrosion-resistance technologies, systems and services.

Tarak Patel, managing director, GMM, said, “This transaction is unique from the stand point that it combines the strengths of three very different partners – promoter family, professional management and private equity, which we believe will help extract synergies and create value for all stakeholders.”

Thomas Kehl, CEO, Pfaudler, said, “This transaction will bring synergies across multiple levels, the combined business will now be in a position to leverage GMM’s highly successful lean-production model and low cost to improve both revenue and profitability”.

Tom Alzin, managing director, DBAG, said, “Given the synergies of the combined business and the long association between Pfaudler and GMM, we believe that the combined business will be EPS accretive from the start and we will continue to remain invested in the Company.”

Subject to the satisfaction of certain closing conditions and regulatory approvals, the transaction is expected to close in November 2020.

Alvarez & Marsal acted as the financial advisors and and Trilegal as legal advisors to GMM Pfaudler.

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