Tano Capital, LLC, a global alternative assets firm, has invested $15 million in Mumbai-based ABG Motors, a newly created arm of ABG Engineering & Construction, through its affiliate in a private equity transaction. ABG Motors is part of India’s largest private sector ship builder, ABG Shipyards, which is owned by entrepreneur Rishi Agarwal. ABG Motors applied the $15 million investment towards its $37 million acquisition of Cemp, an Italian manufacturer of flameproof electric motors. ABG Motors will also use some of the proceeds to finance a manufacturing facility for Cemp in Bangalore. The Italian acquisition is partly leveraged with debt coming from Italy’s Interbanker.
The deal is unique in that Tano Capital acted both as a private equity investor and as a merchant banker. Tano Capital originated the proposal to form a private company in India to acquire Cemp, marketed the proposal to ABG Engineering and invested $15 million of its own funds in the deal. Carlton Pereira, Managing Director of Tano India Advisors, stated, “We identified the opportunity using our network in Italy’s private equity and advisory community. And we took the deal to ABG. It was a proprietary deal, and we took a major role in effecting the acquisition.” The sellers of Cemp were Italian private equity funds. ABG Motors acquired virtually 100% of Cemp; Cemp’s existing management team has retained a small minority stake.
ABG Engineering formed a management team locally to run ABG Motors. The Cemp acquisition will give ABG Motors technical know-how and market access to Europe and the U.S. The soon to be constructed Indian facility will manufacture flameproof electric motors for sale in Asian markets. Cemp’s motors are used in hazardous applications such as petrochemical plants, refineries, and oil and gas pipelines. Cemp, which has a 16% global market share of the flameproof electric motor market, had revenues of $37 million in its latest fiscal year.
Tano Capital, LLC is a global firm which capitalizes on alternative asset opportunities. Its Managing Director is Charles E. Johnson who was formerly co-President of Franklin Templeton Investments.
Source: Business Wire