Asian Paints to acquire controlling stakes in Weatherseal Fenestration and Obgenix Software, popularly known by the brand name “White Teak”. On Friday, Asian Paints shares closed on a higher note following the development.
In Weatherseal, Asian Paints will infuse ₹19 crore for a 51% stake by subscription to equity share capital, subject to customary closing adjustments and conditions precedent. Also, Asian Paints agreed to acquire an additional 23.9% stake in Weatherseal Fenestration from its promoters, in a staggered manner, over the next 3 years. The company signed a definitive agreement with promoters of Weatherseal, Harish Munireddy, and Pratibha SB. EY (Ernst & Young LLP) acted as the financial advisors to Asian Paints for this transaction.
Harish Munireddy would be the Chief Executive Officer and Ms. Pratibha SB would be the Chief Operating Officer at Weatherseal Fenestration, leading further credence to this association with Asian Paints.
“I have leveraged my learnings from my IT career towards making Weatherseal a customer-focused, scalable organization. We are delighted to embark on this journey and be a part of the Asian Paints family. This partnership will help us maximise the business potential, leveraging on the wide network presence and customer connect of Asian Paints”, quoted Harish Munireddy, CEO of Weatherseal Fenestration.
On the deal with Weatherseal, Amit Syngle, MD & CEO of Asian Paints said, ” As part of our endeavour to be an integral part of the home décor business, we find this space attractive in the retail and B2B market segment. This association will enable us to widen our offerings in the home décor space. We look forward to working with Weatherseal to take the business further”
Meanwhile, Asian Paints will acquire a 49% stake in White Teak from the promoters, for a consideration of approximately ₹180 crore, along with an earn-out up to a maximum of ₹114 crore, payable after a year. Also, the company agreed to acquire the remaining 51% stake in White Teak in a phased manner, wherein an 11% stake would be acquired in FY 2023-24 for a consideration based on achievement of certain financial milestones, with maximum consideration of ₹66 crore; and the remaining 40% stake would be acquired in FY 2025-26 for a consideration based on achievement of certain financial milestones, with maximum consideration of ₹360 crore.
Both the promoters of White Teak would continue to lead the business. Pawan Mehta would continue to be the Chief Executive Officer and Mr. Gagan Mehta would be the Chief Operating Officer of White Teak.
On the deal with White Teak, Syngle said, “White Teak offers us a unique opportunity to further strengthen our foray in the home décor space by capitalizing on its capabilities in the designer and decorative lighting products, and thus enhances the overall value proposition of our home décor offerings to the consumers. This alliance would also help Asian Paints to leverage various categories of Home Décor on the online digital space and start exploding the e- commerce space in future.”
White Teak is a private limited company, established in 2016 by Silicon Valley tech entrepreneurs Pawan Mehta and Mr. Gagan Mehta, and is engaged in the business of decorative lighting products and fans.
On BSE, Asian Paints shares ended at ₹3113.80 apiece up by ₹32.05 or 1.04%.
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