S.J.S. Ent soars after board OKs acquisition of 90.1% stake in Walter Pack Automotive

The signing of the definitive agreements for the transformative acquisition of WPI lays the groundwork for a strategic collaboration with Walter Pack Spain and one of its minority shareholders, Antolin.

WPI, a subsidiary of Walter Pack Spain, is a leader in the design and development of high value-added functional decorative parts in the Indian market. The work of Walter Pack's Color&Trim and R&D departments has made it an international reference in IMD, IML and IME advanced technologies, and especially in IMF, the company's core business.

WPI had interim revenues of over Rs 120 crore and EBITDA margins of around 30% with an attractive RoCE of over 50% for FY23. Over two-thirds of WPI revenues are from the automotive segment (passenger vehicles) and the balance one-third are from consumer durables segment.

The agreement between the two makes SJS the leading supplier to the automotive and consumer durables segments in Asia, owing to WPI's state-of-the-art facilities in Pune, Maharashtra and Manesar, Haryana, equipped to cater to future growth.

Walter Pack Spain currently holds an 85.0% stake in WPI with the remaining 15.0% held by the Indian promoter and founder Roy Mathew. Spanish multinational Antolin, which specializes in automotive interior parts, holds a minority stake in Walter Pack Spain.

SJS would acquire the entire 85% stake from Walter Pack Spain and 5.1% stake from Indian promoter and founder. Roy Mathew who will continue to own 9.9% stake and will continue to lead the business.

SJS would pay a total cash consideration of Rs 239.3 crore for 90.1% stake at an LTM EV / EBITDA of approximately 7x. Total upfront consideration to be paid at closing would be Rs 229.8 crore and balance would be paid over the next 18 months. SJS expects to close the acquisition in within a period of 5 to 6 weeks.

SJS intends to finance the transaction via preferential allotment of Rs 30 crore to its promoter & co-founder K. A. Joseph, Rs 75 crore would be financed by debt and the remaining Rs 134.3 crore would be from existing cash balance.

SJS Enterprises is one of the leading players in Indian decorative aesthetics industry, which has one of the widest range of products with presence across traditional and premium products. The Company deals in 11 product categories like decals, logos - domes & 3D lux, aluminium badges, 2D & 3D appliques, chrome plated parts, overlays, IMD, optical plastics, and lens mask assembly. These products primarily serve two wheelers (2W), passenger vehicles (PV) and large consumer durables (CD) industries along with commercial vehicles, medical devices, farm equipment and sanitary ware segments.

The company's net profit rose 3.47% to Rs 14.32 crore on a 7.89% increase in sales to Rs 71.48 crore in Q3 FY23 over Q3 FY22.

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