Plastic extrusion firm Kabra picks minority in US-based GEC

848 Investors following Kabra Extrusion. Share this News with them.

0

Like this story, share it with millions of investors on M3

Plastic extrusion firm Kabra picks minority in US-based GEC

Plastic extrusions maker Kabra Extrusiontechnik Ltd has is acquiring 15% stake in US-based Gloucester Engineering Co. Inc (GEC) for around Rs 20 crore (USD 4.5 million).

Post your opinion here

 

0

Tweet

Share on Tumblr

Watch CNBC-TV18 live only on MYTV >> ALSO READ See latest News about Kabra Extrusion See previous management interviews See what other Experts & Brokerages are saying about Kabra Extrusion Kabra Extrusion BSE | NSE 29/05/12 Are Mutual Funds betting on Kabra Extrusion?

Plastic extrusions maker Kabra Extrusiontechnik has is acquiring 15% stake in US-based Gloucester Engineering Co. Inc (GEC) for around Rs 20 crore (USD 4.5 million). Majority owned by private equity firm Blue Wolf, GEC is into the business of equipment for the plastics extrusion and converting industry.

This strengthens the existing relationship between Kabra Extrusiontechnik and GEC. Formerly known as Battenfeld Gloucester Engineering Co that changed its name to GEC four years ago, it already owns 11.28% in Kabra Extrusiontechnik. GEC and the Kolsite Group (that promotes Kabra Extrusiontechnik) had established a joint venture, Kabra Gloucester Engineering. (KGE), in Daman in 2009. This was GEC's second manufacturing unit besides its key operations in Gloucester, USA.

The deal will enhance the partnership and allow GEC to explore the South East Asian markets further and give better exposure to Kabra Extrusiontechnik in the international market. S V Kabra, Chairman & Managing Director of Kabra Extrusiontechnik Ltd said, "KET, through its minority investment in GEC, will gain exposure to customers in the North American, European and other western world markets." Kabra Extrusiontechnik is India's largest manufacturer and largest exporter of plastic extrusion equipment. It commands about 40% market share in its product range in India and has over 8,000 installations in 65 countries worldwide.

The transaction comes soon after GEC was pulled out of Chapter 11 protection. GEC was hit hard by the 2008 recession and with the backing of Blue Wolf filed a reorganisation plan that was passed few weeks ago, making the private equity firm its majority owner.

Michael Ranson, partner at Blue Wolf, said, "GEC now has two long-term capital partners that are committed to funding its growth." Blue Wolf targets middle market companies with control deals and typically seeks companies having revenues of over $25 million. It actively seeks to invest in firms facing financial or operational distress, besides issues arising from corporate governance or relations with government entities or labour unions.

By: Madhav Chanchani