ACL-led consortium acquires controlling stake in cable manufacturer, Cable Solutions
View(s):A consortium of investors put together by Tempest PE Partners (Pvt) Ltd has acquired a 75 per cent stake in specialist cable manufacturer Cable Solutions (Pvt) Ltd (CSOL) from three of its foreign shareholders for Rs. 710 million.
From left - Champika Coomasaru - CFO, ACL Cables; Anil Surana - Director, Cable Solutions; Daya Wahalatantiri - Director, ACL Cables; Suren Madanayake - MD, ACL Cables; Rune Flinth - Chairman - Cable Solutions; Pawan Tejwani - MD, Cable Solutions; Chehan Perera - MD, Tempest PE Partners; and Sandeep Jayawardena - Tempest PE Partners.
The transaction was completed subsequent to an internal restructuring whereby CSOL’s enterprise value was pegged at over US$7 million, the consortium said in a media announcement.
Tempest PE Partners is a recently formed private equity firm and is a joint venture between Capital Alliance Holdings, one of Sri Lanka’s leading investment banks and Insite Holdings, an investment holding company with regional equities experience.
“Asia Securities Advisors were the exclusive sell side financial advisors, which managed all aspects of the transaction, including articulating the equity thesis, generating investor interest, managing the due diligence process, negotiations and transaction closure,” the statement said.
Sri Lanka’s largest cable manufacturer ACL Cables PLC took a lead role in the consortium by acquiring a strategic 51 per cent stake, while the balance was taken up by four financial investors: the Hirdaramani Group, Associated Electricals, P&S Group and Insite Holdings. Tempest also acquired a small direct stake in the company.
CSOL, which began operations in 2007, is a BOI registered company and operates out of a 2-acre facility in Kadawatha. The company manufactures superior performance cables customized to specific applications, which are exported to customers worldwide. The company generates 95 per cent of its revenue from exports, with key clients in the US, European, Indian and Australian markets.
Commenting on the acquisition, Suren Madanayake, Managing Director of ACL Cables said, “This acquisition is of strategic importance to ACL, as it helps us to diversify our product range as well as customer base and increase our presence in the export market. Going forward, we envisage a lot of synergies between ACL and CSOL in terms of procurements, R&D, cross-selling and operational efficiencies. We are confident the promising growth prospects of CSOL will yield attractive returns on our investment.”