India Hospitality Corp (IHC) said it wants to create a diversified hospitality company after agreeing to buy India-based Mars Restaurants Private and airline catering company SkyGourmet Catering Private for about 110 mln usd, as reported by Business Wire.
IHC said in a statement that it will pay about 91.6 mln usd in cash and the rest in shares on completion of the transaction. An additional amount may be payable if the businesses hit certain performance targets.
Upon completion of the transaction, current India Hospitality shareholders will own approximately 88.9% of IHC and insiders, including Hayground Cove Asset Management and Navis Capital Partners, will hold approximately 51.1%. Affiliates of Navis Capital Partners and Mr. Sanjay Narang, the founder of both SkyGourmet and Mars, will continue to play an active role in the management of the combined businesses going forward.
One of the major shareholders in the target companies, private equity investor Navis Capital Partners, retains an option to reinvest a substantial portion of the sale proceeds into IHC, the company said. The option allows Navis and its affiliates to subscribe for up to 75 mln usd in cash for new IHC shares, which, if exercised will lift Navis' stake in IHC to about 20.7 pct.
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