Japan's building materials firm Lixil Corporation though its Singapore-based subsidiary Lixil Asean Pte Ltd, has acquired 70 per cent stake in Star Alubuild Pvt Ltd, a curtain wall builder for commercial buildings, from the subsidiaries of real estate major DLF and Star Alubuild founder Romi Malhotra, as per a stock market disclosure. The deal has been struck at an enterprise valuation of Rs 79.8 crore which means Lixil has spent around Rs 56 crore for 70 per cent stake.
DLF arms DLF Home Developers Ltd and DLF Projects Ltd together sold 60 per cent stake in the venture while Malhotra sold the balance 10 per cent. Although the debt component on the books of the firm could not be immediately ascertained, DLF could have pocketed up to Rs 48 crore in this transaction.
Since Star Alubuild is no longer a subsidiary, it would also snip the consolidated debt of DLF.
The share purchase agreement was signed on April 25, 2013 and the transaction has now been executed. PricewaterhouseCoopers advised Lixil while Ernst & Young represented DLF.
DLF decided to exit its investment in Star Alubuild as a part of its ongoing non-core divestment strategy.
This is the first major investment by Lixil in the building materials market of India. Through this acquisition, Lixil will acquire an established network for the manufacturing and marketing of aluminum sash. In conjunction with its existing sanitary ware brand American Standard, this will further accelerate Lixil's foray into the Indian market.
"I see this strategic acquisition as the first step to developing India's first national aluminium curtain wall and window sash supplier with full capabilities to design, fabricate and install for the country’s leading developers at a national level," said Bill Crichton, COO of Lixil Asean Pte Ltd.
Established in 2003, Delhi-based Start Alubuild specialises in designing, engineering, fabrication and installing curtain walls for commercial buildings, retail malls and doors and windows for projects throughout India. Since 2003, the company has been involved in projects in Delhi, Mumbai, Chennai and other metro cities.
The firm has around 517 employees and clocked revenues of Rs 100 crore in FY12.
Post acquisition, Star Alubuild will continue to be led by its founder Malhotra.
Lixil Corporation, a subsidiary of Lixil Group Corporation, is one of the largest housing and building materials companies globally which operates in more than 30 countries. The firm targets sales of JPY 1 trillion annually from its global operations.
Last month, it signed a deal to buy Germany's biggest bathroom fittings company, Grohe in a $4 billion deal inclusive of debt. It is buying Grohe from financial investor TPG Capital and Credit Suisse's private equity arm. Lixil has formed an equal equity JV with Development Bank of Japan (DBJ) to buy majority stake in Grohe. Grohe is positioned as a premium bathroom fittings maker and the global deal will also strengthen Lixil’s exposure to India.
Early this year, it also snapped US-based toilet and fixtures maker American Standard as part of global push. The company has been on an aggressive inorganic expansion path over the last two years.
(Edited by Joby Puthuparampil Johnson)
