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Capital Partners to pick up stake in Acme Telepower

Private equity (PE) fund Capital Partners and a prominent Delhi-based industrialist are planning to pick up 5-7% stake in Acme Telepower. The deal size is estimated to be around Rs 600-800 crore, pegging the valuation of the company at around Rs 11,200 crore ($2.8 billion). When contacted, the company management refused to comment on the development.

It is also learnt that Acme Telepower is planning an IPO in the immediate future. The company is set to submit its Draft Red Herring prospectus with the markets regulator Sebi, sources said. The Delhi-based industrialist who is interested in Acme runs companies associated with chemicals and pharmaceuticals, sources added.

Acme Telepower’s revenues have grown from Rs 30 lakh in 2003 to over Rs 200 crore in 2005-06 and Rs 650 crore in 2006-07. As per industry estimates, Acme is on track to post revenues of Rs 1,200 crore in 2007-08. Acme is in talks to buy a Ghana-based telecom shelter company and had recently acquired a Czech-based fuel-cell company for about $50 million, sources added.

Last year, at least seven private equity players including Warburg Pincus, Blackstone, Carlyle and Goldman Sachs, had expressed interest to pick up stake in Acme, but sources said the deals did not go through as they found the company’s valuation very high.

Acme Telepower is amongst the new breed of telecom infrastructure companies, which are riding high on the success of the telecom boom in India. All major telecom infrastructure companies like Quipo, Xcel Telecom, GTL, Essar Infrastructure etc have lined up mega-expansion plans in addition to having full order books.

For instance, previous month, a clutch of private equity players picked up stake in GTL Infrastructure (GIL), which is India’s largest stand-alone tower and telecom infrastructure company, for Rs 1,200 crore.

Similarly, New Silk Route (NSR) — the private equity fund promoted by former DSP Merrill Lynch MD Amit Chandra and former McKinsey global chief Rajat Gupta, recently acquired 73% stake in telecom infrastructure provider and tower company Aster Infrastructure for Rs 233 crore. It was NSR’s second investment in a telecom infrastructure company after R-ADAG’s Reliance Infrastructure.

Acme, however, is not a telecom tower company — its business model primarily revolves around providing energy-saving solutions and ‘green shelters’ to telcos. Acme says its solutions, widely used by Bharti and Vodafone-Essar, help telcos reduce costs of maintaining devices which tackle power fluctuations.

Besides, the company’s ‘green shelters’, absorb the coolness of the night air and release it during the day, thus helping the operators to cut the use of generators and air conditioners at cell sites. It wants to consolidate its markets in South East Asia, Asia Pacific, Middle East and Eastern Europe. The company also plans to open branch offices in Africa.
Source: Economic Times

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