Wednesday, June 19, 2024

Warburg Pincus, Multiples PE enter final lap to acquire stake in Ebco

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Mumbai: Global private equity firm Warburg Pincus is the front-runner to acquire a controlling stake in furniture hardware maker Ebco, two people aware of the matter said. Promoters are planning to sell up to 74% stake in the Mumbai-based company for 3,500 crore.

Geoffrey Nagpal and family, who own the company, may retain a minority stake and run the business for a short while after the sale, the people said on the condition of anonymity.

“Warburg is the front runner. Multiples Alternate Asset Management has also reached the advanced stage and has bid alongside its limited partners (LPs) to acquire the controlling stake,” one of the two people cited above said.

Investing from new funds

Both Warburg Pincus and Multiples are planning to invest from their new funds closed recently.

While Warburg is investing from its Warburg Pincus Global Growth 14 fund which has a $17.3 billion war chest, Multiples is investing from its $640 million fourth fund. Multiples also has the option to co-invest with its LPs and bid for larger deals.

Mint first reported the proposed deal on 2 April. It has appointed investment bank Avendus to help it with the process.

Nagpal declined to comment. Emailed queries to spokespersons for Warburg Pincus and Multiples remained unanswered.

Making from Maharashtra

Founded in 1975, Ebco manufactures furniture fittings, including office and kitchen accessories and hardware. The company has its manufacturing facility in Palghar and Vasai in Maharashtra. It sells products under brands such as Ebco, Livsmart and Worksmart. According to a 12 March Crisil report, the company’s revenues grew to 791 crore in FY23. “The revenues are expected to be around 830 to 870 crore in fiscal 2024,” it said.

“We are targeting to grow to nearly 3,000 crore in revenues in five years,” Nagpal told Mint in April.

As per the Crisil release, the company’s operating margins have been in range of 13.4-15.3% over the past five fiscals.

Ebco sells its products through a network of 30 distributors across India, of which 20 are exclusive. Its current product portfolio includes more than 4500 variants across the office furniture accessories, kitchen system accessories and general hardware systems.

“The fund raise is likely to help the company with the capital to set up two plants as part of the new BIS guidelines set by the government,” the second person cited above said.

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Published: 11 Jun 2024, 03:31 PM IST

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