LU-VE S.p.A. announces the signing of binding contracts for the acquisition of Spirotech Heat Exchangers Private Limited

LU-VE S.p.A. announces the signing of binding contracts for the acquisition of Spirotech Heat Exchangers Private Limited, a leading Indian company manufacturing and selling heat exchanger coils. LU-VE group had set up LU-VE  India a few  years back to undertake sales and marketing operations in India.  The acquisition of Spirotech would allow LU-VE group to use the existing business and operations of Spirotech as a platform to rapidly expand its business in India and nearby countries.  LU-VE group believes that there are significant synergies to be realized by integration of its existing operations in India. Under the binding contracts, LU-VE agreed to acquire 95% shares of Spirotech from existing shareholders while the remaining 5% would be held by Mr S. Srinivasan, who would continue as the Managing Director, and who will enter at closing an agreement granting reciprocal Call/ Put options to buy and sell such 5% after 3 years from closing. Dr. Malhotra would remain engaged with Spirotech as a Consultant and provide full support in transition as Spirotech is integrated with the LU-VE group.  He would also maintain his position as non executive Chairman of Board of Directors of Spirotech, while 4 representatives from LU-VE group and an independent member would join the Board. For the financial year ended March 2016, Spirotech clocked revenues of ~21 Million Euros, EBITDA of ~ 4.5 Million Euros and PAT of ~2.1 Million Euros.  The net financial position as on July 31, 2016 is positive ~ 0.8 Million Euros. At  present,  there  are  no  existing  commercial  relationships  between  Spirotech  and  LU-VE Group. The transaction entails an equity value for 100% of Spirotech equal to 33.6 Million Euros.  The transaction is subject to customary closing conditions and it is expected that the closing would occur by the end of October, 2016.  The acquisition would be undertaken through its 100% subsidiary company in India, LU-VE India Company Private Limited (“LU-VE India”) With the acquisition of Spirotech, LU-VE Group has taken another important step in its strategy of internationalization through acquisitions, which was one of the main reasons for its stock exchange listing in 2015.Spirotech will enable LU-VE Group to significantly strengthen its production base in  the  Asian countries, where it  is  anticipated that there will be important developments  for  the  industrial  and  commercial  refrigeration  industry  due  to  creation  of  a modern cold chain to support agriculture, the food industry and commercial distribution. The President of LU-VE Iginio Liberali said: “We have recognized in Spirotech a company aimed by the same passion for innovation which is the value of LU-VE Group. Spirotech has been for years preferred supplier of some of the most prestigious European brands, thanks to the respect of the highest quality requirements for products and services. In addition, it is well rooted in the local market. This acquisition is of strategic importance for us. It allows LU-VE Group to expand its presence in India and into the nearby countries, to extent the range of our applications,  as  well  as  to  be  closer  to  some  of  our  global  customers.  In  conclusion,  as President of LU-VE Group, I want to welcome the entire team of Spirotech”. The  Chairman  of  Spirotech,  Dr.  R.K.  Malhotra,  said:  “The  Spirotech  team  is  delighted  to become a part of LU-VE.   It will enable us to pool our considerable expertise in innovation to develop the best products for the benefit of customers worldwide.   It will also enable us to accelerate our growth into new markets and in manufacturing capacity and manufacturing excellence”. The Managing Director of Spirotech, Mr. S. Srinivasan, said: “It is a perfect alignment whereby LU-VE can utilise Spirotech as a manufacturing base for entering new markets in Asia and other  territories.  The  efficient,  mass  manufacturing  capabilities  of  Spirotech  and  LU-VE’s strong presence in Europe will be a great advantage to propel growth significantly”.   Source:
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