Italy’s Fabbrica Italiana Lapis ed Affini (FILA) has decided to increase its stake holding in RR Group’s Writefine Products Pvt Ltd (WFPL) to 51 per cent, in a deal that has valued WFPL at around Rs 740 crore (around $114 million), according to a press release.
FILA, which already owns 18.5 per cent per cent stake in WFPL, has entered into a definitive agreement to acquire additional 32.5 per cent stake, partly through primary subscription of equity shares of WFPL and partly through a stake purchase from Indian shareholders led by Santosh R Raveshia, managing director of WFPL.
Following the completion of the transaction, which is subject to conditions and compliance formalities, the Italian company will own a 51 per cent stake in WFPL.
FILA had acquired 18.5 per cent stake in WFPL in January 2012, with the option to increase its stake up to 50 per cent, for an undisclosed amount.
Incorporated in 1975, WFPL is into production and marketing of wooden and polymer pencils, sharpeners, erasers, mathematical and drawing instruments, ball point pens and a range of student art material. The products are sold under RR Group’s flagship DOMS and C3 brands.
“The increased stake highlights our strength and provides us with an opportunity for the development of our brand DOMS,” said Santosh R Raveshia, managing director, WFPL.
Gujarat-based WFPL claims that it has close to 3,000 employees and has grown at 33 per cent CAGR over five years to a turnover of Rs 250 crore.
“This agreement consolidates FILA’s presence in one of the main emerging markets and improves global distribution,” said Massimo Candela, CEO of FILA.
Established in 1920 and managed by the Candela family since 1956, FILA is based in Pero (Milan, Italy). It manufactures and sells art materials in Italy and internationally. FILA’s products are sold under Giotto, Das, Dido, Pongo, Tratto, Lyra and Vinci brands.
Leap Growth Partners LLP acted as financial advisor to WFPL and its Indian shareholders while Khaitan & Co was legal advisor.
On the other side, FILA was advised by Leonardo & Co as financial advisor, Salonia e Associati as international legal counsel and AZB & Partners as domestic legal counsel.
In 2013, French stationery major BIC Group had exercised the call option to raise its holding in seven entities under domestic stationery major Cello Group from 40 per cent to 55 per cent for Rs 280 crore ($45 million).
The French firm completed stake purchase of 40 per cent in six of the seven entities representing the writing instruments business of the Cello Group for Rs 380 crore.
The market for stationery products in India is highly fragmented with players such as Camlin and Natraj.