Deals



Koyuko enters strategic alliance by acquiring 50.3% stake in Camlin for Rs. 360 cr


Posted: 12th July 2011 11:34

Japan's Kokuyo Co will acquire 50.3% stake in stationery products maker Camlin for an estimated Rs. 360 crore.


The two companies have signed a Joint Venture Agreement under which the Japanese firm will acquire a majority stake in Camlin in three tranches, after which the Indian firm will be converted into a joint venture company.

Camlin commented "The transaction will bring together two highly recognised stationery companies with complementary product portfolios, and will facilitate sustained long-term growth for both companies,"

Under the agreement, Kokuyo will acquire 10 per cent stake in Camlin through preferential allotment at a price of Rs. 85 per share. Besides, the Japanese company will acquire another 20.3 per cent stake from Camlin promoters at Rs. 110 per share.  Followed by an  an open offer for another 20 per cent stake in accordance with SEBI regulations, at a price of Rs. 110 per share, the statement said.

As per the information available on the Bombay Stock Exchange, Camlin promoters hold 38.13 per cent stake in the company.

Exact details on the size of the deal have not been disclosed however according to the industry sources, the entire transaction will be for around Rs. 360 crore.

Camlin Chairman and Managing Director Dilip Dandekar said: "We believe that Kokuyo and Camlin have complementary product portfolios and this joint venture will facilitate faster rollout of portfolio of products by Camlin."

He said the company has been looking to scale up revenues and increase the portfolio of products through line extensions.

As part of the deal, Dandekar will continue as the Chairman and Managing Director of Camlin, and Shriram Dandekar as the Executive Director.

"Kokuyo Co will bring in managerial, marketing, manufacturing and, product research and development skills, and will have the right to nominate 4 directors for appointment on the Board of Camlin," it said.

Speaking on the deal Nitin Potdar M&A Partner J. Sagar Associates who represented Dandekar Family the founders of Camlin and who are in management for more than 80 years said that “whilst structuring these types of joint ventures it is important to structure the relationship which would create confidence, mutual trust and respect amongst the partners.”   My previous experience of advising many MNCs entering India helped managing expectations and creating truly win-win situation for both partners adds Mr. Potdar.

Kokuyo was advised by Anderson Mori & Tomotsune in Japan and AZB & Partners in India regarding domestic legal issues.  JSA Mumbai led by M&A Partner Nitin Potdar and Rinku Bhiwandkar advised Camlin.  J. Sagar Associates (JSA) is a leading national law firm in India comprising of over 200 lawyers and consultants including more than 40 partners.  For almost two decades the firm has provided legal advice and services to international and domestic clients 

 

M&A Chair, Partner Nitin Potdar commented

“This is a classic strategic alliance between Camlin & Kokuyo Japan for the Indian market.   India offers a unique opportunity for companies aspiring to become global leaders in their products & brands, and hence we see lot of top Japanese companies extremely active in India.  Geographically India is a vast country with its own complexities; hence working with right local partner could certainly help accelerating growth strategy.”

Mr. Potdar can be contacted on +91 22 43418505 or by email at nitin@jsalaw.com


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