Havell?s plans $150m war chest

Delhi-based electrical products manufacturing company, Havell?s India Ltd, has decided to embark on inorganic growth in the European market, reports Arun Kumar.

Delhi-based electrical products manufacturing company, Havell’s India Ltd, has decided to embark on inorganic growth in the European market, and is raising a cash chest of about $150 million to fuel acquisitions. The company has already signed non-disclosure agreements (NDAs) with three companies in Europe and is expected to close one of the deals before the end of March.

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“Havell’s has signed the NDAs with the three companies and is currently conducting the due diligence process in all the three places separately,” a senior company official who did not want to be named told Hindustan Times.

"The discussions are on simultaneously with all the three companies, but we will acquire only one of them," he added.

The deal is expected to be worth between $150 million and $200 million. Typically these companies have a turnover over of around $400 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of around 10 per cent or $40 million, investment banking sources said.

The proposed deal will be funded through internal accruals and fresh funds that will be raised shortly through a fresh issue of equity shares.

Havell's told stock exchanges on Tuesday that its board had approved a proposal to raise $150 million through different instruments including a Qualified Institutional Placement, Foreign Currency Convertible Bonds and Global Depository Receipts.

Email Arun Kumar: arunkumar@hindustantimes.com