Mumbai-headquartered process equipment manufacturer GMM Pfaudler will acquire a majority stake in the global business of its parent, the US-based Pfaudler Group, from French private equity firm Deutsche Beteiligungs AG (DBAG).
GMM, directly and through its Swiss subsidiary Mavag AG, and GMM's promoter Patel family will acquire, a 54% and 26% equity stake respectively in the Pfaudler Group. DBAG will continue to retain the balance 20% stake.
The consideration for the 54% stake acquired by GMM, which is expected to be around $27.4 million, will be funded by the company through a mix of internal accruals and debt, Pfaudlar said. Pursuant to the acquisition, GMM shall become the holding company with the entire business of Pfaudler being consolidated into the company, with consolidated revenue of Rs 2,000 crore ($ 266 million) and EBITDA of approximately Rs 250 crore.
Founded in 1962 by G.V. Patel at Karamsad, near Ahmedabad, Gujarat Machinery Manufacturers got listed on the Bombay Stock Exchange by 1987. In the same year, US-based glass line manufacturing specialist Pfaudler Inc acquired a 40 per cent stake in the company. By 1999, it increased its stake to 51 per cent. Parent Pfaudler was acquired by National Oilwell Varco (NOV) of France in 2012, and sold to French private equity firm Deutsche Beteiligungs AG (DBAG) two years later.
With the acquisition, GMM will become the world leader in corrosion-resistance technologies, systems, and services with 12 manufacturing facilities across 8 countries and 4 continents and employing around 1,500 people.
"Over the last 5 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 transformational acquisition. Being an integral part of Pfaudler for more than 3 decades, not only do we understand the business very well but we have also managed to build a collaborative relationship with different Pfaudler units around the world," said Tarak Patel, Managing Director, GMM.
Thomas Kehl, CEO, Pfaudler said, "Over the last few years Pfaudler has spent significant capex in modernising 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."
Tom Alzin, Managing Director, DBAG said, "The rationale behind our investment in Pfaudler in 2014 was to back a high-quality supplier of corrosion-resistant equipment in a global niche market. The Group's progress over the past 5 years along with the phenomenal performance from GMM validates our investment decision."