MUMBAI: Sigma Electric Manufacturing Co. said on Thursday that Argand Partners, a New York-based private equity fund, had acquired a full shareholding in the company for an undisclosed sum, in a deal that will mark the US mid-market buyout specialist’s entry into the Indian market.
Argand acquired stakes held by Goldman Sachs Private Equity, which controlled 90 per cent of the company and other shareholders. Though the companies did not disclose terms of the transaction, sources told ET that Argand paid $250 million to acquire the company.
The transaction will be the first investment of Argand in India and will signal the entry of a fresh set of asset managers into the Indian private equity market. Launched last year, Argand is a spinoff from the US buyout firm Castle Harlan Inc. The firm specializes in middle-market buyout investments.
Argand edged past Aion Capital Partners, the other serious contender for the company, sources said.
ET first reported the story on edition dated October 6, saying Argand has agreed to buy a full stake in Sigma Electric for $250 million from its existing owners Goldman Sachs Private Equity. Goldman held 90 per cent of Sigma while the residual 10 per cent is with Sajjan Agarwal family, who sold his company in 2007.
Late last year, Goldman Sachs has mandated Jefferies to run a formal process to find a buyer for the company. The bidding process has seen interest from several private equity funds including Aion Capital Partners— a joint venture between Apollo Global Management and ICICI Venture, Blackstone Group and Carlyle.
Sigma Electric is a Pune-based engineering and electrical fittings company. Founded by Sajjan Agarwal in 1982, it caters to customers in the North American and European markets through exports from its Indian plants.
The company counts leading multi-national corporation customers such as Emerson-Appleton, Eaton-Cooper, Legrand, Hubbell, S&C, Whirlpool, Stanley Black Decker, Siemens, ABB, Lowes, and Electrolux.
Sigma has nine world class manufacturing facilities located in Pune and Jaipur. It produces castings in aluminium, aluminium bronze, zinc, steel, iron, and copper. With sales of over Rs 1,000 crore, the company generates about 90 per cent of its revenues from the US market. It employs 3,300 employees, including 1,500 engineers.
Investment from a mid-sized firm such as Argand comes at a time when large sovereign and pension funds are making big-ticket investments in India. Earlier this month, Canadian pension fund CDPQ announced a $250 million investment in the asset reconstruction company of Edelweiss.
Argand Partners primarily invests within North America with a focus on industrials, industrial-related energy, consumer, and manufacturing and services sectors, according to its website.
Interestingly, this will be the second large secondary buyout by a private equity fund in the manufacturing sector in recent years. Earlier this year, KKR sold its portfolio company Alliance Tires to Yokohama Rubber for $1.2 billion after buying the company from Warburg Pincus in 2013 for about $500 million.
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Source: Economic Times
