Reports confirm that private venture capital firm True North has entered an agreement to buy a majority stake in Shree Digvijay Cement Company Limited, securing the third buyout deal for the equity firm in four months.
According to a statement from the private equity firm, it will acquire São Paulo-based Votorantim Cimentos’ 75 percent stake in Shree Digvijay Cement. True North has also issued an open offer for buying out the remaining 25 percent stake in the Mumbai-listed cement company. The open offer is being managed by JM Financial Limited.
Further from the reports, True North has not disclosed the exact value of the agreement it has signed with Votorantim Cimentos. But the open offer has been made at Rs 23.33 per share of the cement company, which converts to about Rs 83 crore for a 25 percent stake.
The price level of Shree Digvijay Cement’s shares were apparently down by 6 per cent on Nov. 13, bringing the market value of the company to Rs 331.5 crore ($45.6 million). This would mean that the 75 per cent stake of Votorantim could be valued at about Rs 250 crore.
Partner at True North, Srikrishna Dwaram, mentioned that the Indian cement company is placed competitively. He also indicated that the True North would be pushing fresh capital into the building materials manufacturer.
Citing reliable sources, the private equity firm has previously managed companies in the building materials segment, like the Robo Silicon Ltd, that makes construction aggregates and the RDC Concrete India, a ready mixed concrete company based in Mumbai. True North is currently utilizing its sixth fund, for which the company has raised $600 million till now, sources further said.
For the record, the cement manufacturing firm, which sells its materials under the branding of Kamal Cement, employs around 300 people. As per the company’s website, its Jamnagar’s cement factory has a producing capacity of 1.2 million tons in a year.