Shares of GMM Pfaudler rallied more than 8% to Rs 6,360 on the BSE on Friday after the process equipment manufacturer acquired a 54% stake in its parent firm Pfaudler Group for a consideration of around $27.4 million.
The acquisition will be funded by the company through a mix of internal accruals and debt.
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% and 26% equity stake, respectively, in the Pfaudler Group.
The private equity firm will continue to retain remaining 20% stake.
Pursuant to the acquisition, GMM shall become the ultimate holding company with the entire business of Pfaudler being consolidated into the company.
The company expects to complete the transaction by November this year.
GMM Pfaudler posted a 2.77% on-year (YoY) growth in consolidated net revenue at Rs 154.43 crore during April-June quarter (Q1FY21). Net profit increased by 8.5% on year to Rs 19.19 crore while net profit margin came in at 12.43 per cent.
On the operational front, the company’s earnings before interest, tax, depreciation, and ammortisation (Ebitda) stood at Rs 27.49 crore in Q1FY21, down 0.36% while Ebitda margin came in at 17.8%, down 56 bps.
The company had also announced that it has entered into binding term sheet on June 30, 2020 with De Dietrich Process Systems India (DDPSI) for itemised sale of their Glass Line equipment manufacturing facility at Hyderabad for consideration equivalent to 6.25 million euros.
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