JOIN USBengaluru-based Rajesh Exports (REL) has acquired European Gold Refineries, the 100 per cent holding company of Valcambi, for $400 million in an all-cash deal.
Valcambi is the world’s largest precious metals refining company and is headquartered in Switzerland. Valcambi has processed and sold 945 tonnes of gold and 325 tonnes of silver on an average per year during the last three financial years, which is more than the annual consumption of gold in India.
For the last three years on an average per year Valcambi generated revenues in excess of $38 billion (Rs 2,36,500 crore) and EBITDA of $33 million (Rs 205 crore) by refining and selling 945 tonnes of gold and 325 tonnes of silver per year. Valcambi is a zero debt company with considerable cash surplus on its balance sheet.
“We expect the global gold market to expand due to this alliance and also expect a larger share in the global gold market due to the acquisition,” Rajesh Mehta, chairman, Rajesh Exports, said.
“REL did not see any other asset which can be remotely similar to Valcambi.
On the other hand, we did not want to buy any dirt cheap assets to get in trouble later like what has happened with many Indian companies in the recent past,” Mehta added.
Grant Thorton assisted Rajesh Exports in due diligence and Credit Suisse is part financing the acquisition through a long term debt.
When asked as to why the company part financed the acquisition via Credit Suisse, Mehta said that the part financing by Credit Suisse only shows the confidence of CS in the asset.
“The coming together of REL and Valcambi would ensure that Valcambi improves on its global share of gold business, by opening up new markets in India, Middle East and China. Valcambi would also focus on forward integration and on innovative gold products in the European markets, by utilising the technical expertise of Rajesh Exports,” said Valcambi CEO Michael Mesaric.