Power and electrical equipment company Havell's has announced to acquire $594-million SLI Sylvania lighting business at an aggregate purchase price of $300 million in an all-cash deal.
Termed as the largest acquisition by an Indian electrical product company, the deal has been signed by Havell's Netherlands BV, a Netherlands incorporated subsidiary of Havell's with SLI Holding.
SLI Sylvania, headquartered in Frankfurt, is a global designer and provider of lighting systems for lamps and fixtures. Post-acquisition, it will become a 100 per cent subsidiary of Havell's.
The acquisition is expected to be financed with non-recourse debt facilities of $160 million and recourse facilities of $105 million, with the balance coming from internal accruals. Barclays Capital is leading the consortium of banks in arranging for the finances.
The closing date of the deal is expected in April-May. Post-acquisition, the combined turnover of the two entities would touch $1billion and Havell's would get access to 40 international markets.
According to Anil Gupta, joint managing director, Havell's, there are no plans of now to merge SLI Sylvania with Havell's.
"It will remain a subsidiary. The management team of Sylvania will continue to remain with the business, to help grow the combined organisation," he added.
SLI Sylvania's 10 manufacturing plants located across Europe, Latin America and Africa would come under Havell's control, which means that two-thirds of Havell's revenue would accrue from international markets.
Along with expanding its product portfolio in the European, Latin American and other developed markets of the West, Havell's will be launching Sylvania brands in India.
With this acquisition, Havell's will own brands like Sylvania, Concord:marlin, Lumiance, Marlin, Claude and Linolite-Sylvania.
According to Qimat Rai Gupta, chairman and managing director, Havell's, "This acquisition will provide us a platform with strong brands and established distribution channels, which Havell's can build on."