Defence electronics manufacturer Apollo Micro Systems Ltd has signed a definitive agreement to acquire a controlling stake in Premier Explosives Ltd from its promoter AKS Family Trust.
Apollo Micro Systems will acquire 41.33% of Premier Explosives from AKS Family Trust for Rs 1,550 crore (around $162.4 million) in an all-cash transaction, valuing the shares at about Rs 697.5 per unit, according to stock exchange disclosures.
The acquisition will trigger a mandatory open offer to acquire at least an additional 26% stake from public shareholders at Rs 698 per share.
If the open offer is fully subscribed, Apollo Micro Systems' holding in Premier Explosives could rise to 67.33%, giving it majority ownership and management control.
The transaction is subject to approval from the Competition Commission of India and other customary closing conditions, and is expected to close during the third quarter of the current financial year.
Following completion of the transaction, Premier Explosives will become a subsidiary of Apollo Micro Systems while continuing to operate under its existing brand. The AKS Family Trust, which currently owns the entire promoter stake in Premier Explosives, will exit its holding and seek reclassification as a public shareholder after completion of the transaction.
Premier Explosives manufactures high-energy materials, rocket motors, defence munitions and countermeasure systems, besides providing operation and maintenance services for solid propellant plants at ISRO's Sriharikota centre and the Solid Fuel Complex at Jagdalpur.
Apollo Micro Systems, which designs and manufactures electronic, electro-mechanical and engineering systems for defence, aerospace and homeland security applications, said the acquisition will strengthen its capabilities in defence systems and energetic materials while expanding its participation in next-generation defence and space programmes.
"Together, we are better positioned to safeguard national security interests and support our armed forces with greater scale, resilience and technological self-reliance," said Baddam Karunakar Reddy, managing director of Apollo Micro Systems.
Premier Explosives founder and chairman A N Gupta said the combination would help the company accelerate innovation and expand its presence in India's defence and aerospace ecosystem.
Apollo Micro Systems was advised by Crawford Bayley & Co as legal counsel.
The promoter, AKS Family Trust, was advised by Deloitte Touche Tohmatsu India as transaction adviser and Pioneer Legal as legal counsel.
