Salzer Electronics has entered into an agreement with CMS Group, the promoters of Kaycee Industries, to acquire the group’s 72.32% stake in Kaycee. It would also make an additional offer to purchase 26% from the public. The total purchase consideration will be ₹22 crore.
Rajesh Doraiswamy, managing director, Salzer, told The Hindu that ₹16 crore would be needed to acquire the stake held by the CMS Group and the balance for the open offer. The acquisition would help Salzer consolidate its business in industrial electrical switches. Its turnover would immediately increase by ₹25 crore. Kaycee has strong distribution network in the east and Maharashtra. “Our presence is currently limited in the east. We will get a good network of channel partners there,” he said.
Kaycee has a manufacturing plant at Ambarnath in Maharashtra. The acquisition would take the total manufacturing facilities of Salzer to six. On further investments in the plant, he said it would be decided in another two months.
Industrial switchgear segment constitutes 42% of Salzer’s current revenue. The ₹550-crore, Coimbatore-based company would make the investments mostly from internal accruals.
“Kaycee Industries will continue to remain a listed entity and both the companies would share technological support and know-how with each other,” according to a statement from Salzer.