Rishab Intruments to buy Poland's Lumel

Interacting with Deccan Herald, Rishab Insturments Managing Director Narendra Goliya said his company has signed a share purchase agreement on May 25 to acquire 85 per cent of the shareholding in Lubuskie Zaklady Aparatow Electrycznych (Lumel SA) in a privatisation deal, while the balance 15 per cent of shares are given to the past and present workers of Lumel free of cost as per the privatisation act of Poland.

Though not willing to disclose the pay-out for the deal, Goliya said the acquisition will be funded through a combination of both debt and internal accruals. Further, he pointed out that Rishab (a debt-free company) for the last fiscal (2010-11) posted revenues of over Rs 75 crore, while the liability of the target company (Lumel SA) worth equivalent to Rs 60 crore will be taken on its books. Lumel SA, according to Goliya, is among the top-3 players in the industrial automation equipment market in Poland with over 20 per cent market share and exports 60 per cent of its products to Europe.

Lumel clocked revenues of US$27 million for calendar year with a healthy EBITDA margin — quantified in rupee terms works out to Rs 13 crore, according to Rishabh’s financial advisor Siddharth N Bafna.

Responding to a specific query, Goliya said currently, Rishab annual turnover hovers around Rs 75 crore, while the Group in the post-acquisition phase is expected to have a group turnover of Rs 200 crore.

Goliya said the acquisition of Lumel forms part of inorganic growth strategy as Rishab will combine marketing efforts of both companies to penetrate Asian markets, while it will introduce some of their own products such as panel meters, transducers, multifunction devices and transformers using the market infrastructure of Lumel.

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