Sintex Industries has picked up 100% stake in France-based plastic component systems maker Nief Plastic for €30.9 million.
Nief Plastic acquisition offers access to new markets, technologies
MUMBAI: Sintex Industries has picked up 100% stake in France-based plastic component systems maker Nief Plastic for €30.9 million.
The transaction is being made through the company’s France-based subsidiary, Sintex France SAS.
The company’s board of directors has approved the buy. BNP Paribas was the sole advisor.
DNA Money had reported in its October 9 edition that Sintex, the maker of water tanks, may buy out an European firm in November.
Amit Patel, managing director, Sintex Industries, said: “The acquisition will widen our international footprint, having gained access to new markets and technologies.
Moreover, it establishes us as a global player in the international plastic component and composite markets.”
Nief Plastics manufactures a wide range of exterior and interior plastic component systems. The products are used in the electrical, automotive, aerospace sectors and in building.
It has seven factories in France, two in Eastern Europe and one each in Tunisia and Morocco.
In a statement, Sintex said Nief Plastics’ possession of diversified technologies and presence in developed markets would provide access to higher value-added offerings.
On other end, it would be beneficial to Nief Plastic as it offers the benefit of low-cost manufacturing and the huge potential of the rapidly evolving Indian market.
Sintex will retain the existing management and R&D personnel of Nief Plastics and Gilles Nief will continue as president and CEO of the company.
Besides, the company will retain all its existing customers. The new customers include companies like Peugeot, Renault, Faurecia, General Motors and Visteon in the automotive sector; Schneider, Sagem, Siemens, Legrand, Thyssenkrupp, Areva and Alstom in the electrical segment and Dassault Aviation and Thales in the aeronautics space.
Analysts Chirag Shah and Ritesh Shah of SSKI said in a note to clients on October 8 that Sintex may post $700 million in revenues by fiscal 2010, led by the nationwide rollout of prefabs and scalability offered by the new plastic products business.
The shift in product mix towards high margin, low capital-intensive business would improve Sintex’s profitability. An acquisition in Europe and successful
integration with Indian operations would lead to a paradigm shift in the business model, they said.
The global composites market is currently valued at $6.2 billion, and is expected to grow rapidly. The use of plastic as a composite in automobiles is expected to increase from 57 kg in 1990 to 139 kg per passenger vehicle by 2010, according to SSKI.
Besides automobiles, composites find wide application in electrical accessories and medical devices.
Earlier, Sintex had acquired automotive plastics division of Bright Brothers in September for Rs 149 crore. Recently, a clutch of foreign investors - HSBC, Lehman Brothers, Merrill Lynch, Master Trust, Bank of Japan and Batterymarch Financial -bought 14.3% stake in Sintex Industries from Warburg Pincus.
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