Assisted the company acquire another EMS CompanyIndustrials
Acquisition of 100% through a mix of cash and stock
IMAP advises India based Syrma Technology Pvt. Ltd. on its cash cum stock merger with SGS Tekniks. IMAP also assisted Syrma in raising Private Equity Capital for the cash purchase of a part stake in SGS Tekniks ahead of the Merger. The combined business unit creates a platform with 4500+ employees, 110+ customers and 8 production facilities across India. Both the companies have a considerable track record of growth and the combined business is expected to emerge as the largest EMS provider for the industrial sector. Private equity fund, Global Environment Fund, also participated in the transaction to enable Syrma acquire a strategic stake in SGS Tekniks ahead of the merger process.
Established in 2005, Syrma Technology provides turnkey electronics contract manufacturing and innovative products in RFID & magnetics, and achieved a revenue of INR 4072 mn in FY 2019-20. Syrma is part of Tandon group which has 40-year presence in electronics manufacturing and exports. The Company has 4 production facilities in India and serves 65+ OEM customers across sectors of aerospace, automotive, consumer, healthcare, industrial, opto-electronics, power, RFID/Wireless, smart homes, software and telecom.
SGS Tekniks is a high-mix and medium-volume electronics manufacturing services company serving industrial companies and achieved a revenue of INR 4267 mn in FY 2019-20. The company’s offerings include PCB Assemblies, Box Build and Electronic Design Services. The company has 4 manufacturing units in India and serves clients across a diverse set of industries including industrial electronics, energy metering, water purification, power supplies, auto electronics and office automation.
Praveen Nair was lead from IMAP India along with Debashish Panigrahi and Puneet Kochar for the transaction. The team researched the EMS sector, had a belief that it is a fragmented industry with tailwind and seemed ripe for consolidation to enable faster growth and margin expansion. Syrma and SGS not only complemented each other’s business but also were differentiated from its peers by the size of operations, quality of earnings and the strength of their management team. IMAP also helped with involvement of a global private equity fund, GEF, to help part cash financing of the transaction and provide a governance framework for the merged entity with a defined path to public listing in the medium term.