Crompton Greaves Consumer announced on February 22 that it had entered a definitive deal to acquire 55 percent of the shares in
Gandhimathi butterfly equipment for Rs 1,379.68 crore as a consumer prisoner company that appeared to be stepping up its game in small domestic equipment.
The business, which will pay Rs 1,403.00 per share, would also pay Rs 30.38 crore for a butterfly trademark owned by the promoter group entity.
Crompton will also undertake a required open offer for 26% of companies that manufacture, market, and distribute kitchen and small household appliances, for 1,433.90 per share. This price offer has a starting price of Rs 666.57 crore.
The overall agreement, which includes 55 percent of the shares, open offers, and trademarks, is projected to cost Rs 2,076.63 crore and would be funded through a mix of internal and debt accrual.
Crompton was rumored to be interested in acquiring the company, according to MoneyControl.
This acquisition, according to Crompton, is a “transformational step” toward the company’s long-term strategic ambition of becoming a leading Pan-Indian leader in small household equipment.
Butterfly, as one of the few integrated producers in this field, provides a direct scale in kitchen equipment with a varied portfolio, he added.
“Crompton put a road map in a long-term strategic plan to” increase the core product line,” stated Shantanu Khosla, Managing Director of Crompton. The primary goal of this strategy is to strengthen the small household appliance sector.
Butterflies is a strong brand in South India, having a history dating back more than five decades. A stronger small household equipment company led by a mixer grinder will be built on channels and proven butterfly brands and brand strategies. This lays the groundwork for a full-fledged kitchen drama, allowing each home to feel more connected.
“This action will provide an opportunity for the butterfly brand to achieve the reach of Pan-India,” stated VM Lakshminarayanan, Chairperson, Butterflies. Crompton is a good match for me, and we have a lot of potentials to complement each other.”
Butterfly’s Managing Director, VM Seshadri, told CNBC-TV18 that he was pleased with Crompton’s offer, adding, “After the deal, the existing promoter would no longer be classified as a promoter, and would no longer be a member of the board.” They’ll take up less than 10% of the stock and have agreed to a non-compete condition with Crompton.
Crompton’s financial advisor and manager for open offers are Investment Banking Box, while Crompton’s legal counsel is Khaitan & Co.
