Sintex acquires Nief Plastics

Sintex Industries Ltd has infomred that Sintex France SAS, a downstream subsidiary of Sintex Holdings B.V., Netherlands ("Sintex Offshore Holdings") has acquired 100% of the shareholdings of Nief Plastics SA, France ("Nief"). Sintex Offshore Holdings is a wholly owned subsidiary of the Company.

Nief Plastics manufactures a wide range of exterior and interior plastic component systems and thermosets. These products are widely used not only in the Electrical, Automotive, and Aerospace sectors, but also in Household appliances, the building industry, sports / leisure as well as the finished products market. The possession of diversified technologies and presence in developed markets would provide Sintex access to higher value added offerings. The Company is ranked #1 in the French Thermosets Industry, The Company believes that the acquisition could enable it to establish as global players in the international plastic components and composite markets. On other end, it would be beneficial to Nief Plastic as it offers the benefit of low cost manufacturing and the huge potential of the rapidly evolving Indian market.

Commenting on the acquisition, Mr. Amit Patel, Managing Director of the Company said,

"This acquisition represents a continuation of Sintex' aggressive inorganic growth programme for the Plastic division. Through these acquisitions, we have been able to widen our international footprint, having gained access to new markets and technologies.

The acquisition of Nief Plastic has enabled us to establish ourselves as global players in the international plastic component and composite markets. Nief Plastic is a consistently performing high growth company, with a portfolio of established products that have tremendous potential, catering to leading manufacturers in European and African markets. This transaction would also enable us to gain access to new and credible high quality injection molding and bhinsertion technologies, which could be implemented at lower costs in India as well, enabling us to move up the value chain." Moreover, the acquisition will provide Sintex an access to Nief's large customer base which will be tapped for marketing Sintex own products.

Details of the Transaction

The Board of Directors of the Company has approved the acquisition of Nief Plastic, in an cash transaction of Euro 30.70 million (Equity Value).

The acquisition is being made through the Company's French based step down subsidiary, Sintex France SAS.

The Company will retain the existing management and R&D personnel of the Company. Importantanly, Mr. Gilles Nief will continue in his existing capacity as the President and CEO of the Company, lending his experience and knowledge to drive growth going forward. Post the transaction, the Company will continue to retain all of its existing customers.

Key benefits from the transaction

- Considerable enhancement in Product Portfolio & Market Reach

Nief Plastic manufactures a wide range of exterior and interior plastic component systems and thermosets. These products are widely used not only in the Electrical, Automotive and Aerospace sectors, but also In Household appliances, the building industry, sports / leisure as well as the finished products market. The possession of diversified technologies and presence in developed markets would provide Sintex access to higher value added offerings.

- Access to high profile clients

The Company, with the acquisition of Nief Plastic, would gain access to new and credible customers such as Peugeot, Renault, Faurecia, and General Motors and Visteon in the automotive sector, Schneider, Sagem, Siemens, Legrand, Thyssenkrupp, Areva and Alstom in the electrical segment and Snecma, Dassault Aviation and Thales in the aeronautics space. This is expected to help empanel it as a reputed international manufacturer and supplier across these markets.

- Well developed manufacturing capabilities

The acquisition would enable the Company to gain access to manufacturing assets at key locations across Europe and Africa. Nief Plastic has seven factories in France, two in Eastern Europe and one each in Tunisia and Morocco. Their facilities are well developed to cater to a range of operations. In order to meet its customer's demands in innovative sectors, Nief Plastic has integrated new technologies with the help of its R&D team and created partnerships with companies to master other allied technologies.

Most of Nief Plastic customers employ a 'Just in Time' strategy to their inventories. To be competitive and to be able to respond to this dynamic environment, the Group's manufacturing facilities are strategically located near its main customers. It has also responded to its customers move towards offshoring, by setting up plans in Eastern Europe and Africa.

- Synergies

Nief Plastic critical strengths lie in its product excellence, innovation and superior customer service. Since 1930, the company has evolved from an electrical equipment manufacturer to its present position as a leading supplier of plastic injection moldings and thermosets, which have a wide range of applications over a range of sectors. Post acquisition, Sintex would be able to leverage Nief's technologies and product portfolio to supply to its customers in India the enhanced product offering and better quality at a much lower manufacturing cost.

The Company's focus in the Plastic business is on Automotive / Electrical Plastic Composites and Prefabricated structures. This acquisition would add value to the Company's product mix and provide impetus to its existing business.

The deal was referred by BNP Paribas who lead run successfully assisting Sintex throughout including negotiation, due diligence and structuring.