Plywood maker Uniply Industries Ltd said on Thursday it has agreed to acquire architectural design firm Vector Projects (I) Pvt. Ltd for Rs 64.12 crore ($9.5 million) in a cash-and-stock deal.
Uniply will pay Rs 40.99 crore in cash and the remaining in shares, it said in a stock-exchange filing. Vector will be a wholly owned subsidiary of Uniply and the impact of this acquisition will be effective from 1 April 2016, it added.
“This is a marquee transaction for Uniply, in line with our stated strategy to move from a commodity to a solutions-based business,” said Keshav Kantamneni, chairman and managing director, Uniply. Vector founder and CEO Umesh Rao will head the business, Kantamneni added.
Rao started Vector Projects 15 years ago. The company offers interior design and execution services and posted Rs 210 crore revenue in 2015-16.
“The transaction is a win-win as Vector will continue to maintain (an) independent identity, while being fully backward integrated and supported by a larger financial and marketing team,” said Rao.
Vector has manufacturing facilities at Bhandup and Pen in Maharashtra. The facilities enable pre-fabrication of interior products used in Vector's projects. The company has delivered about 1,500 projects spread over an area of 10 million square feet, it said.
Vector has a tie-up with ArtMatrix Malaysia to provide modular furniture with manufacturing and testing facilities in the Southeast Asian nation. Its clients include Tata Consultancy Services, Pfizer, ICICI Bank, Citibank, Goldman Sachs, JP Morgan, Morgan Stanley, Tata Motors, Volkswagen and Mumbai Police.
Vector is the second acquisition for Uniply this year. In March, Uniply had acquired the plywood and block board unit of Euro Decor Pvt. Ltd for Rs 42 crore.
Uniply makes and sells plywood, laminates and allied products in India. It has a network of about 900 dealers across India. The company posted revenue of Rs 135 crore in 2015-16 and a net profit of Rs 3.8 crore, according to stock-exchange data.
Shares of Uniply touched a one-year high of Rs 275.40 on Wednesday but closed around Rs 240 apiece on Thursday, up nearly 120% since February.
Uniply competes with the likes of Century Plyboards (I) Ltd and Greenply Industries Ltd, which is backed by private equity firm WestBridge Capital Partners.
Like this report? Sign up for our daily newsletter to get our top reports.