Monday, March 5, 2007

Packaging firm Arrow Coated bids for UK-based Adept Polymers

Mid-sized packaging firm Arrow Coated Products is looking to acquire Adept Polymers, a subsidiary of the UK-based Stanelco, a leading packaging specialist that makes bio-degradable plastics. Arrow Coated submitted a bid for Adept Polymers through Arrow Coated UK, its UK arm, last week.

The process is likely to be finalized by March-end. Adept Polymers is a developer and manufacturer of fully biodegradable plastics that combine water-soluble and non-toxic properties with much of the versatility and functionality of its traditional counterparts.

Arrow Coated has a marketing tie-up with Stanelco to market the latter’s product in the Indian market. Adept Polymers has been valued at over Rs. 20 crores.

Stanelco has decided to hive off Adept as the UK packaging firm is planning to focus on radio frequency welding technology. Besides Arrow UK, packaging companies from France, US and UK are bidding for Adept.

Last year, Bilcare, one of the leading pharma packaging companies in India, had acquired the UK-based clinical trials services provider DHP. Bilcare had acquired the US-based packaging and research firm ProClinical in 2005.

Read The Economic Times article.

ICSA not to sell 14% stake to CVC International; may sell the same to Goldman Sachs

ICSA, a Hyderabad-based embedded technology and electrical infrastructure solutions provider, which was reported to have raised $52 mn from CVC International and Goldman Sachs, now, seems to have excluded CVC International from its investor list.

ICSA will sell 14% equity to global investment bank Goldman Sachs, which will infuse the entire $52 mn to be pumped into the company, part of it for the equity and the rest in foreign currency convertible bonds (FCCBs).

ICSA will not sell equity to Citigroup Venture Capital International Growth Partnership Mauritius (CVC). The company has cited non-fulfillment of regulatory and technical conditions for not going ahead with CVC. The venture capital firm had a 45-day due diligence period, but could not complete the proceedings in time. CVC had sought an extension, but failed to get it from the market regulator SEBI. ICSA was also not in favour of extending the deadline.

Goldman Sachs is believed to have evinced interest in acquiring the 14 per cent stake at higher amount. The deal with CVC was at around Rs. 950 per share, while Goldman Sachs’ offer is at Rs. 1250 per share. This is in addition to Goldman Sachs’ commitment of $22 mn in ICSA through FCCBs.

Goldman Sachs will now hold 14% stake in ICSA and FCCBs to the tune of $22 mn. ICSA is convening a board meeting on March 17 to consider the Goldman Sachs offer.

At present, foreign institutional investment holding in ICSA stands at 25.37%. The company was looking at the investments to meet its working capital requirements, for inorganic investments and R&D related expenses.

Read the Business Standard article.
Related Post:
ICSA Limited attracts $52 mn foreign investment from Citigroup and Goldman Sachs

Himatsingka Seide completes Bellora acquisition for Rs 116 crores

Bangalore-based silk fabric manufacturer Himatsingka Seide has concluded its 70% stake acquisition in Italian bed linen brand Giuseppe Bellora SpA. The valuation of the acquisition is €20 mn (Rs. 116 crores). The equity value of the transaction is €13 mn (Rs. 75.4 crores) while Bellora has a debt of €7 mn (Rs. 40.6 crores).

Established in 1883, Bellora has presence across leading European department stores along with brand stores. Himatsingka Seide plans to capture the value market taken by the retailers by opening Bellora stores in the US and European markets. Currently Bellora is retailed through 17 owned stores and 350 retail points.

In June 2006, Bellora closed down its own manufacturing facility for restructuring initiative. Henceforth the sourcing for the brand will be undertaken from Himatsingka's production facility at Hasan, Karnataka, which has a manufacturing capacity of 200 mn metres.

Continuing its acquisition strategy, Himatsingka is in talks with other bed linen brands in the US and UK, which are expected to be completed in a couple of months. During the quarter ended December 2006, Himatsingka Seide registered total income of Rs. 53 crores with a net profit of Rs. 15 crores.

Read the article in Business Standard.
Related Post: Himatsingka to acquire majority stake in Italian textile brand Bellora

Zicom eyes overseas acquisitions, venture capital funding

Zicom Electronic Security Systems Limited, a Rs. 100 crore, Mumbai-headquartered listed electronic security equipment maker, may conclude two overseas acquisitions, one in China and the other in a nearby country, by May-June 2007.

The acquisitions will be in the range of Rs. 30-35 crores each and will be funded through the company's internal accruals and proceeds of the $11 mn FCCB issue which it had floated in September 2005.

Zicom presently enjoys around an 18% market share in the domestic electronic security equipments segment. Zicom may acquire a 49% stake in a firefighting equipment manufacturing company in a nearby country. The acquired company enjoys an order-book position of Rs. 75 crores and its products will be introduced into the Indian market under the brand name of that company so that the high brand value of Zicom in the Indian electronic security space does not get diluted. In China, Zicom is looking at a JV or a complete buy-out of a firm manufacturing electronic security equipment.

Presently, Zicom sources its components from various players before assembling them into a product. Earlier, this business was mainly restricted to corporates but now it has expanded to cover many other segments as well such as railways, buses, airports and ports which would need highly sophisticated electronic security equipment to meet emerging threats.

The company is also scouting for venture capital funding to fund its retail foray. The company has already opened 11 shops showcasing its products and plans to open 20 more within the next two months.

Read The Economic Times article.

Tata Steel to buy Australian coal mining company

Post its mega-purchase of Corus, Tata Steel may now buy into a coal mine in Australia, as part of a larger strategic plan to scout for global opportunities to secure cheaper raw materials. It is looking at buying possibilities elsewhere across the world too. Tata Steel already has minority stake in a coal mine in Queensland, Australia.

Read more in The Economic Times article.

ICICI Bank to transfer stake in insurance and AMC businesses to new company ICICI Holdings

ICICI Bank will transfer its holdings in its insurance and asset management businesses to a new holding company called ICICI Holdings. The bank would transfer to ICICI Holdings its 74% equity holdings in ICICI Prudential Life Insurance Company and ICICI Lombard General Insurance Company and 51% in Prudential ICICI Asset Management Company and Prudential ICICI Trust to the new entity.

The book value of ICICI Bank's investment in ICICI Prudential Life is Rs. 1300 crores, ICICI Lombard General Insurance Rs. 600 crores and in ICICI Prudential Asset Management Company and the trustee company is about Rs 50 crores.

The decision to move these assets to the new company was prompted by the Reserve Bank of India (RBI) regulation that banks can invest a maximum of 20% of their net worth in subsidiary companies.

The bank has applied for approvals from the RBI and the Insurance Regulatory and Development Authority (IRDA) for transferring its stake in the insurance and mutual fund ventures.

ICICI Holdings may consider a public listing of its equity shares at an appropriate time to meet a part of the further capital requirements of ICICI Life and ICICI General. ICICI Bank intends to retain majority ownership in ICICI Holdings.

Read the Business Standard and The Economic Times articles.