Gateway Distriparks - Cool Move
GDL acquires control of Snowman
Gateway Distriparks Ltd (GDL) has acquired a 50.10% stake in Snowman Frozen Foods (Snowman) for Rs48.12 crore. This deal puts the enterprise value of the firm at about Rs104 crore. GDL will infuse fresh funds in Snowman by subscribing to 34,390,000 new equity shares of Snowman at a price of Rs10.50 per share. Further GDL will purchase 861,000 existing equity shares of Snowman at a price of Rs17.50 per share from Amalgam Foods. GDL is already sitting on a huge cash pile of Rs300-350 crore that it had raised from a global depository receipt issue earlier this year. Hence the funding of the latest acquisition will not be an issue.
About Snowman
Snowman is engaged in the business of providing cold-chain logistic services across the country through its comprehensive facilities for storage, handling, refrigeration,transportation and secondary distribution of chilled and frozen foods. Snowman is owned by Amalgam Foods, Mitsubishi Corporation, Mitsubishi Logistics Corporation and Nichirel Logistics Group Inc. These stakeholders will hold the balance stake of 49.9% in the company.
Acquisition at 3.6x FY2007 sales
Snowman has recorded revenues of Rs14 crore for H1FY2007 and an operating profit of Rs2 crore. However at the net level, the company has not made any significant profit because of its Rs8-10-crore debt and high depreciation. For FY2007 Snowman is expected to earn revenues of Rs30-32 crore and an operating profit of Rs4-5 crore. Hence Snowman’s acquisition has been carried out at valuations of 21x FY2007 enterprise value/earnings before interest, depreciation, tax and amortisation (EBIDTA) and 3.6x sales.
Deal will expand GDL’s portfolio of logistic services
This acquisition will bring another business segment within GDL’s ambit, thereby further expanding the Indian company’s portfolio of logistic services. Agreed that at FY2007E EBIDTA of Rs5 crore, Snowman will not provide GDL with the much-needed growth trigger, but with the gradual scale-up in its operations coupled with the ramp-up in its capital expenditure, Snowman can add significant value to GDL’s business in two to three years’ time.
Gateway Distriparks Ltd (GDL) has acquired a 50.10% stake in Snowman Frozen Foods (Snowman) for Rs48.12 crore. This deal puts the enterprise value of the firm at about Rs104 crore. GDL will infuse fresh funds in Snowman by subscribing to 34,390,000 new equity shares of Snowman at a price of Rs10.50 per share. Further GDL will purchase 861,000 existing equity shares of Snowman at a price of Rs17.50 per share from Amalgam Foods. GDL is already sitting on a huge cash pile of Rs300-350 crore that it had raised from a global depository receipt issue earlier this year. Hence the funding of the latest acquisition will not be an issue.
About Snowman
Snowman is engaged in the business of providing cold-chain logistic services across the country through its comprehensive facilities for storage, handling, refrigeration,transportation and secondary distribution of chilled and frozen foods. Snowman is owned by Amalgam Foods, Mitsubishi Corporation, Mitsubishi Logistics Corporation and Nichirel Logistics Group Inc. These stakeholders will hold the balance stake of 49.9% in the company.
Acquisition at 3.6x FY2007 sales
Snowman has recorded revenues of Rs14 crore for H1FY2007 and an operating profit of Rs2 crore. However at the net level, the company has not made any significant profit because of its Rs8-10-crore debt and high depreciation. For FY2007 Snowman is expected to earn revenues of Rs30-32 crore and an operating profit of Rs4-5 crore. Hence Snowman’s acquisition has been carried out at valuations of 21x FY2007 enterprise value/earnings before interest, depreciation, tax and amortisation (EBIDTA) and 3.6x sales.
Deal will expand GDL’s portfolio of logistic services
This acquisition will bring another business segment within GDL’s ambit, thereby further expanding the Indian company’s portfolio of logistic services. Agreed that at FY2007E EBIDTA of Rs5 crore, Snowman will not provide GDL with the much-needed growth trigger, but with the gradual scale-up in its operations coupled with the ramp-up in its capital expenditure, Snowman can add significant value to GDL’s business in two to three years’ time.
Labels: Gateway Distriparks
posted by Raj @ 9:07 AM
0 comments
0 Comments:
Post a Comment
<< Home