Ratnamani Metals & Tubes acquires majority stake in Ravi Technoforge Pvt Ltd

Ratnamani Metals & Tubes Limited ("the Company"), today (i.e. 5th October 2022), has entered into the Definitive Agreements for the Subscription of Equity Shares and acquisition of the Equity Shares in Ravi Technoforge Private Limited ("RTL") from its existing shareholders in three tranches over the period based on the performance metrics and other terms & conditions. It may kindly be noted that subject to the satisfaction of the stipulated Conditions Precedents ('CPs'), the Company shall hold ~53.00% stake on fully diluted basis in RTL on the first closing. The 1st Tranche of ~53.00% stake acquisition shall consist of 26% of the issued, subscribed and paid-up share capital through share subscription in RTL under the preferential allotment and ~27% of the issued, subscribed and paid-up share capital in RTL (post dilution) through purchase from the existing shareholders.

RTL is one of the leading manufacturers of high precision forged and turned bearing rings, gear blanks and other similar bearing components having ultimate end use across widespread industrial and automotive applications. RTL caters mostly to all the large bearing manufacturers not only in India but across the globe.

RTL is a consecutively profit making company, based out of Rajkot, Gujarat and has been into this business since year 1990.

RTL is based out of Rajkot, Gujarat and has capability of manufacturing rings in the range from 40mm-400 mm with unit weight upto 25 kgs.

The Company, in order to add a new growth driver both domestically and globally, have decided to acquire the majority stake in the target (RTL) that is the part of the ecosystem of one of the most matured and a stable growth industry over the decades. RTL enjoys long standing business relationship with most of the global bearings giants. RTL has large basket of product approval from its customers and enjoys status of green-flow/on-line/direct supplier. The Company feels it can supplement and complement the business of RTL and can bring significant value not only to both the entities, but also to its customers, employees and stakeholders.

The business prospects of the Target resembles the economic growth cycle mainly manufacturing by significantly contributing the revenue from segments of industrial and mobility applications which will help the Company to enlarge its canvass of products and sector.

The Company aims to leverage its managerial, technical and financial capabilities to scale its operations making it more sustainable and create further long term value for its stakeholders.

Subject to the satisfaction of Conditions precedents, the subscription and acquisition of shares under the 1st Tranche i.e. ~53% of the issued, subscribed and paid-up Equity Share Capital in RTL is expected to be completed within 30 days and balance ~47% stake in RTL to be acquired in two tranches over the period of which 2nd Tranche of 27.02% is expected to be completed on or before July 31, 2024 and 3rd Tranche of 19.98% to be completed not later than July 31, 2027, however, the acquisition of the 3rd Tranche shall be subject to certain options as may be availed by the existing shareholders of the RTL during that time.

The Company shall subscribe 39,66,750 Equity Shares of RTL through preferential allotment and shall acquire 41,19,300 Equity Shares from the existing shareholders of the RTL. So, the Company will have a holding of 80,86,050 Equity Shares representing ~53% of the issued, subscribed and paid-up share capital of the Company (post dilution) of RTL on the date of first closing, which shall be subject to CPs.

On this occasion, Shri Prakash M. Sanghvi, Chairman & Managing Director of the Company, narrated as under: "Joining hands with RTL marks the beginning of a new chapter for Ratnamani. As we strongly believe and we have always strived to create and build long term value for all our stakeholders including our customers and employees, we are sure this acquisition will also bring lots of value to Ratnamani and its stakeholders.

The partnership with RTL will not only provide good growth & business opportunities in diverse sectors but will further boost the consolidated position of Ratnamani in much more sustainable manner. There are lots of similarities between RMTL and RTL, to name few are cultural values, customer centric approach, unmatched quality standards and fulfilling commitments apart from largely similar processes, plant operations and wide pool of human resources can make this engagement more promising and value prospective".

Speaking on the occasion, Shri Amrutlal Bharadia, Managing Director of RTL, described that, this event as historical moment for RTL, its shareholders and the employees. He further said, by joining hands along with equity, RMTL will also bring their expertise, experience and efficiency standards to RTL and it will help to scale us new heights and fuel our growth plans. RTL with new growth capital & support from RMTL will work on augmenting capacities, re-organizing business operations more efficiently and enlarge product/process offerings to match customers' expectations.

Source : Equity Bulls

Keywords

RatnamaniMetalsandTubes StakeAquisition RaviTechnoforge