Warburg Pincus acquires majority stake in Imperial Auto

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US-based private equity (PE) major Warburg Pincus has acquired a majority stake for an undisclosed sum in automobile parts maker Imperial Auto Industries. VCCircle had first reported the development in January.

Stone Plant Investments B.V., (SPI), an affiliate of Warburg Pincus, a leading global private equity firm, has acquired a majority stake in Imperial Auto Industries Limited and its affiliated companies (Imperial group), Warburg Pincus said in a statement.

According to the deal, whose financial details were not disclosed, the Netherlands-based investment vehicle of Warburg will acquire a 70% stake in Haryana-based Imperial Auto Industries. In the first tranche, SPI proposes to acquire 51% of the shareholding of Imperial Auto, and, after a time period of one year, SPI will additionally acquire 19% as part of the second tranche of the transaction.

SPI will also gain indirect control in group company SJ Rubber Industries Ltd after it is fully acquired by Imperial Auto. SJ Rubber and Imperial Auto are currently group companies with common promoters.

This is likely Warburg Pincus’ second investment in six months, after it invested in the parent company of IPO-bound homegrown ride-hailing giant Ola in July last year.

In February, VCCircle reported, which was later announced, that the New York-headquartered private equity major was also set to pick up a minority stake in a Gujarat-based medical device and consumables manufacturing firm, Micro Life Sciences Pvt Ltd.

Based out of Faridabad, Imperial was founded in 1969 and is currently among India’s largest manufacturers of fluid transmission products for automobile and off-highway sectors. The Group generates revenues of approximately 2,200 crore through a product portfolio including rubber hoses, metal/nylon tubes and hose assemblies.

“This is a very interesting time in the auto industry, and we are excited to partner with Warburg Pincus to help us strengthen our position as a leading global FTP components supplier out of India. This investment will help us fund our future growth plans which include capacity expansion, creation of best-in-class facilities for domestic and export clients and acceleration of EV related product development,” said Tarun Lamba, Managing Director and CEO, Imperial

He added that the Warburg Pincus association should enable the firm to further attract high quality talent to Imperial and bring new capabilities to the market.

Viraj Sawhney, Managing Director, Warburg Pincus India, said “We are impressed by the Group’s long track record of growth, a very diversified and high-quality global customer base and industry leading return metrics. We look forward to supporting Tarun and the team and leveraging the Imperial platform to build a leading diversified Indian auto components player serving both automotive and off-highway markets including electric vehicles.”

EY acted as the sole financial advisor to Imperial.