Apar Industries entered into an agreement to acquire 42% %in the listed Uniflex Cables to become the single largest shareholder in the company.
Apar Industries will make a public offer for acquiring another 20% stake in the company.
In addition Apar will subscribe to 4 million warrants at the SEBI formula price to increase its stake to 49% making the deal size about Rs 700 million plus the open offer.
Uniflex Cables has been valued at an enterprise value of over Rs 1,600 million.
The key members of the Baid family, Ajay Kumar Baid and Jay Kumar Baid will assume leadership positions of managing director and joint managing director of the company.
Vijay Kumar Baid, will continue as the non executive chairman of the company. The family continues to hold about 15% shareholding on a fully diluted basis.
The Rs 70 billion cable industry has been growing at over 25% on a per annum basis and holds promise to continue this growth for the next decade.
“With this acquisition, we are in position to take care of all the end-to-end requirements of our customers in the booming power transmission and distribution sector carrying power from power plants all the way through to end users,“ said Kushal Desai, managing director, Apar Industries. “This acquisition diversifies our product range from bare conductors and increases the product offering that we have to some of our largest customers both in India and abroad.“
Uniflex Cables, known for its wide range of cables for the power and telecom sectors, too would benefit significantly from the synergistic acquisition. With its pioneering/ cutting edge technology, the company also produces a wide range of specialty products including for applications in nuclear power plants and undersea cables.
“This partnership with Apar Industries will help Uniflex with access to financial resources at a lower cost, a customer base for exports and operating synergies to grow the cable business aggressively, said Ajay Baid, managing director, Uniflex Cables.
“Considering the strong domestic demand for cables in the power sector and steady demand in the telecom sector, we are targeting a turnover of Rs 2,500 million in FY09. This would be achieved by leveraging Uniflex`s existing capabilities and strengths. We plan to increase the turnover to about Rs 5,000 million by FY11 by making a capex of around Rs 600 million.“
Yes Bank was the exclusive strategic and financial advisors to Apar Industries for this transaction.
Apar Industries is a USD 400 million diversified company offering value-added products and services in power transmission conductors, petroleum specialties and synthetic rubbers.
Uniflex Cables is the manufacturer of power and telecom cables in India.
Source: My Iris