Blackstone completes open offer to seal management buyout of Igarashi Motors

Private equity major Blackstone Group, along with auto parts maker Agile Electric Sub Assembly Pvt Ltd and other entities, has completed the open offer for Igarashi Motors India Ltd, sealing the management buyout transaction for the auto component maker. The PE firm had partnered Igarashi Motors’ managing director Padmanaban Mukund for the two-tiered deal. 

The acquirers managed to buy just 0.02 per cent additional stake in the open offer and together now hold 74.64 per cent, just meeting the minimum public holding norms, which allows promoters to hold a maximum of 75 per cent stake in a listed firm. 

In July last year, Blackstone Group acquired controlling stake in privately-held Agile Electric—which in turn held 62.8 per cent of public listed Igarashi Motors—through a mix of fresh subscription of securities besides stake purchases from existing investors, including HBL Power Systems among some other individual shareholders like KK Nohria, Mukund and Jose Joseph, for Rs 332.36 crore ($55 million). The transaction paved way for an open offer. 

In a parallel move, Igarashi Motors’ chief and one of the shareholders of Agile Electric, Mukund also subscribed to optionally convertible debentures for around Rs 60 crore. Mukund converted these debentures into equity on Thursday and now holds a little over 30 per cent stake in Igarashi Motors. The remaining 44 per cent stake is held by Agile Electric and Blackstone.

With the open offer not finding many takers Blackstone’s commitment to the transaction did not budge much from the original deal to buy Agile Electric. 

Agile Electric is involved in production of DC motor sub-assemblies and also ventured into production of AC motors and subassemblies in 2012. The company had an annual capacity of 39.6 million components and production facilities in Chennai. Agile Electric exports majority of its products to manufacturers like Delphi Automotive, Inteva Products and Bosch.

Its subsidiary Igarashi Motors reported 21 per cent rise in revenues for the first six months of the fiscal at Rs 176 crore over the year-ago period and net profit more than doubled to Rs 23 crore.

Related: Blackstone acquiring auto component maker Agile Electric, leading management buyout of Igarashi Motors for up to $74M

(Edited by Joby Puthuparampil Johnson)

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