Redington (India) Ltd is acquiring 25.97 per cent stake of its Cayman Island-based overseas business holding arm Redington International Holding Ltd, from the Gulf-based private equity fund Investcorp or IVC, for $113 million, the company has disclosed in a statement to the Bombay Stock Exchange today.
The company had earlier announced that it was acquiring the stake but did not disclose the deal value. At this valuation, the overseas arm is valued at $435 million (Rs 2,300 crore).
Shares of Redington India Ltd shot up 6 per cent to close at Rs 77.95 a share on Monday on the BSE in a weak Mumbai market. At this price, the parent company is valued at Rs 3,104 crore or around $580 million.
Currently, Redington owns around 69 per cent stake in this arm through a wholly owned Mauritius-based entity. With this stake buy, Redington’s shareholding in the overseas arm will go up to 95.56 per cent. The balance is held by employees of the Redington group.
The transaction is to be completed within three months' time.
Although it cannot be immediately ascertained exactly when Investcorp invested in this firm, three years ago, Investcorp invested $98 million to pick up 36 per cent stake in Redington’s Middle East and Africa (MEA) business.
Incorporated in 1961 and located in Chennai, Redington India is in the business of supply chain management for IT and non-IT products. The company offers its products through a network of distributors in India, the Middle East and Africa.
Redington India had raised Rs 67 crore funding from Ashish Dhawan-led ChrysCapital in 2006 before launching its IPO in 2007. ChrysCapital had exited its investment with a profit in 2009.
In July 2011, Standard Chartered Private Equity and ECL Finance (an NBFC arm of Edelweiss) together picked up 12 per cent stake in Redington for around Rs 438 crore. Standard Chartered PE currently holds around 12 per cent in the firm.
Investcorp is an investment holding company and makes investments in alternative assets through its subsidiaries, focusing on private equity, real estate and technology investments. It also manages hedge funds. Investcorp was founded in 1982 and is based in Manama, Bahrain with offices in New York and London.