According to the agreement, the company will acquire 34.4 per cent of the Pfaudler Group by itself and 19.6 per cent of the Pfaudler Group through its wholly-owned subsidiary, Mavag AG
GMM Pfaudler share price surged over 8 per cent to Rs 6,360 apiece on BSE, a day after the company announced that it would acquire 54 per cent stake in the global business of its parent, the Pfaudler Group, for a consideration of about Rs 200 crore, funded through a mix of internal accruals and debt. Last week, the company’s share price hit a fresh 52-week high of Rs 6,913.85 apiece. The company in a press release informed it has signed definitive agreements to acquire a majority stake in Pfaudler Group from the private equity firm Deutsche Beteiligungs AG Fund VI (DBAG) for the stake.
Around 10 AM, GMM Pfaudler shares were trading 5.3 per cent higher at Rs 6,191.85 apiece, taking the total market capitalisation to Rs 9,016.88 crore. In comparison, S&P BSE Sensex was trading 0.75 per cent or 285 points up at 38,506. According to the agreement, the company will acquire 34.4 per cent of the Pfaudler Group by itself and 19.6 per cent of the Pfaudler Group through its wholly-owned subsidiary, Mavag AG.
As part of the transaction, Tarak Patel (Managing Director of the Company) and Ashok Patel (Director of the Company), will also acquire 26 per cent of the shareholding in Pfaudler Group. The balance 20 per cent of the Pfaudler Group will continue to be held by the existing ultimate shareholders of the Pfaudler Group. “GMM will become the world leader in corrosion-resistance technologies, systems and services with 12 manufacturing facilities across eight countries and four continents and employing around 1,500 people,” the company said.
“Over the last few years, Pfaudler has spent significant capex in modernizing its manufacturing facilities across the globe. 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,” said Thomas Kehl, CEO, Pfaudler.