February 2008
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PE funds buy 3% in Acme Tele Power for Rs 400 cr

Mauritius-based private equity funds Monsoon India Inflection and Jackson Heights Investments have picked up a 3.35% stake in the Gurgaon-based Acme Tele Power for Rs 400 crore. The deal pegs the valuation of Acme, which manufactures and supplies energy conservation solutions for telcos, at around Rs 11,940 crore (just under $3 billion). This marks the second round of private placements in Acme. Last year, Acme had offloaded a 1.66% stake in the company to three PE firms – DB International, Earthstone Holdings and Kotak Mahindra Capital – for Rs 197 crore.

Acme Tele Power’s promoter and managing director Manoj Upadhyay confirmed the development and said this would the final private placement before the company’s plans to tap capital market.

The proposed IPO will see Acme’s promoters offer about 17.3 million shares for sale which will reduce the promoters’ stake to 84.6% from the current 94.7%. The company has already filed a draft red herring prospects (DHRP) with Sebi for its float.

Acme Tele Power is amongst the new breed of telecom infrastructure companies, which are riding high on the success of the telecom boom in India. The company is seen as a very attractive investment for PE firms considering its explosive growth in the last three years – the company’s revenues grew from Rs 30 lakh in 2003 to Rs 34 crore in ’04, to Rs 647 crore in ’06-07. In the first nine months of this fiscal the company’s revenues have crossed Rs 1,000 crore.
In the recent past, Acme has also made two major acquisitions abroad – late last year, it acquired Norway-based Reime Network Implementation Services. Reime develops and maintains wireless and wireline telecommunication infrastructure across seven countries in Africa. “This acquisition will help us tap the African market. We will combine the products and solutions we have with that of Reime’s experience in catering to the telecom operators in Africa. On the cards is a foray into Europe, South America and seven African countries – Ghana, Ivory Coast, Nigeria, Congo, Kenya, Tanzania and Uganda,” he added. The Acme group has also bought out Canada-based Astris which is an R&D company specialising in developing fuel cells. This acquisition will help the company foray into manufacturing of fuel cells.

Acme’s solutions are currently focused on two main areas – manufacture and sale of telecom passive infrastructure hardware, and provision of installation and annual maintenance services, which accounted for 96.4% and 3.6% respectively of the total revenue for the fiscal ’06-07.
Source: Economic Times

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