Coimbatore-based electrical switch maker Salzer Electronics Ltd on Friday said that it has agreed to acquire 72.32% stake in its peer company Kaycee Industries Ltd in an all cash deal, the company said in a statement.
Salzer added that it will also make an additional offer to buy the remaining 26% stake in the company via an open offer. Salzer will be spending a total of Rs22 crore for the entire acquisition, the statement said.
The company will fund the acquisition through a mix of internal accruals and debt. Mumbai based investment bank Singhi Advisors acted as advisor to both Salzer and promoters of Kaycee.
Kaycee’s principal products include rotary switches, rotary cam switches, micro and toggle switches, weather tight switches, breaker control switches, counters and fuse fittings. The deal will strengthen Salzer’s position in industrial switchgear segment which constitutes approximately 42% of Salzer’s current revenue.
“Kaycee being pioneers in the cam operated rotary switch will help our company further to increase our market share in the industrial switchgear industry and consolidate our market leadership in this niche product. This acquisition is in line with our strategy of strengthening and growing our suite of product offerings. The resulting synergy would enable us to penetrate further into the market on the back of enhanced product offerings. We expect that this strategic acquisition to enable us to generate long term value for all our stakeholders," said Rajesh Doraiswamy, Joint Managing Director at Salzer Electronics Ltd.