Trans-India Acquisition Corporation (TIL), a blank check firm backed by former ICICI Bank chairman N Vaghul, has announced its reverse merger with Hyderabad-based photovoltaic (PV) modules maker Solar Semiconductors Ltd. TIL will acquire at least an 80% stake for $375 million. TIL is also assuming long-term indebtedness in excess of $50 million of Solar Semiconductor. There are also some riders on the deal. The purchase price will be increased or decreased based on certain performance-based measurements.
Solar Semiconductor has manufacturing plants located in Hyderabad with capacity for 75 MW of module production. It is also developing another facility, with capacity for both PV module and solar cell manufacturing, in SEZ in Hyderabad. The firm reported revenues of $15.2 million in FY08, and expects to reach $140 million this year. The consolidated revenues for first two quarters is $54.5 million.
The company plans to use the money to further its expansion, including acquisitions. The reverse-merger will be done through share-swap and the merger agreement is expected to get regulatory approvals by February next year. Solar Semiconductor’s shareholders will get TIL’s shares valued at $8. Also the performance based part of the deal will depend upon Solar Semiconductor’s adjusted net income for FY10.
TIL was listed on AMEX in February 2007 and was looking for acquisitions in the lifesciences sector. TIL is chaired by N Vaghul and led by Bobba Venkatadri, Nalluru Murthy and Sarath Naru (managing director of APIDC Venture Capital)
SPACs In India
A Special-purpose acquisition company (SPAC) is a pooled investment vehicle that allows public stock market investors to invest in private equity type transactions. But they are usually focused on one transaction and are more liquid There are several SPACs operational in India for past few years. Last year blank check firm India Hospitality Corp, which is listed on AIM, announced the acquisition of Mumbai-based Mars Restaurants and its sister concern SkyGourmet Catering for approximately $110 million.
Earlier this year Phoenix India Acquisition Corp acquired a 65% stake in Citius Power Limited. Another AMEX listed SPAC is Millennium India Acquisition Company, which acquired 14.9% stake in Delhi-based brokerage firm SMC Global for about $40 million.
There are also couple of other SPACs such as East India Company Acquisition Corp (backed by IT & ITES industry veterans Dipak Nandi, Kary Shankar and Saurabh Srivastava) and Global Services Partners Acquisition (floated by Avinash Vashista, founder of Tholons and former CEO of neoIT, and backed by Saurabh Srivastava). Earlier this year HCL’s Shiv Nadar had indicated plans of raising a special purpose acquisition company (SPAC) at NYSE Euronext.