Private equity firm Actis, through its affiliates Argon South Asia Ltd and Argon India Ltd, has bought the general lighting business of Halonix Ltd for an enterprise value of Rs 160 crore ($23.87 million), as per a stock market disclosure.
As a part of the deal, Halonix had previously transferred its general lighting business to its subsidiary Halonix Technologies Ltd and has now sold it to Actis. Halonix, also majority owned by Actis, now retains the automotive lighting unit.
The general lighting business manufactures and sells compact fluorescent lamps, luminaires and LED technology-based lighting products used in households and commercial establishments. Its manufacturing facilities are located in Haridwar and Dehradun.
This business competes with the likes of Philips, Havells and Osram and constituted almost half of the company’s revenues. However, it was in losses till recently.
For the year ended March 31, 2013 it had revenues of Rs 238 crore with a segment loss of Rs 24.5 crore against revenues of Rs 250 crore with a segment profit of Rs 29 crore from the auto lighting business.
However, in the first quarter ended June 2013, the general lighting business showed a marked improvement. Its revenue grew 39 per cent to Rs 69.9 crore with a turnaround in the business. The unit clocked a segment profit of Rs 4 crore against a loss of Rs 6.67 crore in the year-ago period.
Halonix scrip was up 1.16 per cent and was quoting at Rs 48 a share on the BSE in mid-day trades in a strong Mumbai market on Monday. At this price it has a market cap of Rs 134 crore.
Halonix had earlier tried to sell its general lighting business. In July 2010, the firm decided to sell the general lighting business to Actis, but the deal was scrapped and the company decided to continue with both automotive and general lighting as two separate and distinct lines of business.
Actis had acquired a majority stake in Halonix way back in 2006-07 through a mix of stake purchase from the promoters, preferential allotment and an open offer for around Rs 315 crore. It currently holds 66 per cent in the firm. With the new deal it has committed around Rs 475 crore for Halonix and its general lighting business. The open offer was made at Rs 190 a share and Actis’ investment is deep underwater.
This is the first deal announced by Actis in India this year. However, it had reportedly invested $50 million in Indore-based Symbiotec Pharmalab Ltd.
It will also be the first full buyout transaction for the PE firm in years. Actis, which has built its initial portfolio in India with a preference for control deals, is raising a new India-focused fund, seven years after the previous $325 million country specific pool was raised for investments in India. With over $5 billion in assets under management, it also raising its fourth global fund.
(Edited by Joby Puthuparampil Johnson)