Process equipment manufacturer GMM Pfaudler on Thursday said it has acquired a 54 per cent stake in its parent firm Pfaudler Group for a consideration of around USD 27.4 million.
GMM, which supplies process equipment to pharmaceutical and chemical industries, 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.
"As per the agreements, GMM, directly and through its subsidiary Mavag AG, and the Patel family will acquire 54 per cent and 26 per cent equity stake, respectively, in the Pfaudler Group," the company said in a statement.
The private equity firm will continue to retain remaining 20 per cent stake.
"The consideration for the 54 per cent stake acquired by GMM, which is expected to be around USD 27.4 million (nearly Rs 205 crore), will be funded by the company through a mix of internal accruals and debt," it said.
Pursuant to the acquisition, GMM shall become the ultimate holding company with the entire business of Pfaudler being consolidated into the company.
Subject to the satisfaction of certain closing conditions and regulatory approvals, the transaction is expected to close in November this year, the company said.
"Over the past five years, we have shown an unparalleled track record of growth at GMM and it is now time to take our company to the next level through this acquisition," GMM Managing Director Tarak Patel said.
Patel also 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.
"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.
Pfaudler CEO Thomas Kehl said, "Over the past few years, Pfaudler has spent significant capex (capital expenditure) in modernising its manufacturing facilities across the globe."
He 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.
In addition, Pfaudler's order book remains strong on the back of robust demand driven by the chemical and pharmaceutical industries.
"Together with the GMM management and DBAG, who we have worked closely with over the past five years, we expect to complete a seamless integration and hit the ground running," Kehl added.
Alvarez & Marsal and Trilegal acted as the exclusive financial and legal advisors respectively to GMM Pfaudler.