Asia Pacific buyout fund Navis Capital Partners is taking majority control in lubricants manufacturer Sah Petroleums. The fund will acquire up to 60% stake in the company through three steps – open offer (20%), preferential allotment of shares (27.3%) and the rest through acquiring promoters stake. Navis has done several buyouts in India. In 2006, Navis had acquired controlling stake in Delhi-based fast food chain Nirula’s. It has also acquired a controlling stake in Mumbai-based call center Andromeda last year.
Sah Petroleum manufactures a wide range of speciality automotive and industrial lubricants, rubber processing oils, greases, automotive lubes and various grades of other oils. The firms has plants in Vasai (near Mumbai) and in Daman and claims to have one of the largest in-house storage farms in the private sector in India for storing oils sourced from all over the world. For FY08, the firm reported net sales of Rs 205.5 crore and profit after tax of Rs 21.3 crore.
Under the preferential allotment of shares, the fund is buying 12 million shares of Sah Petroleums at a price of Rs 26.65 per equity share, an aggregate sum of Rs 32 crore. The share price of Sah Petroleums reached Rs 8 earlier this month, and Navis is paying more than triple of that.
Since the preferential allotment was announced on Friday, the share price has jumped nearly by 100% to Rs 19. The open offer for the company has also been announced for 27.5% stake (20% of diluted capital), in which Navis is offering Rs 48.5 per share. If the open offer is fully successful, Navis will have around a 60% stake in the firm.
Another similar deal was when Global Infrastructure Partners (GIP), an infrastructure sector focused private equity firm backed by Credit Suisse and General Electric, formed a joint venture with Delhi-based private equity fund Zeus Inframanagement to pick up a 74% stake in Vizag-based East India Petroleum Ltd.