True North to buy Votorantim Cimentos' 75% stake in Shree Digvijay Cement

Deal value not disclosed; buyer has been investing in Indian construction and building material sector for more than a decade

Private Equity firm True North has signed an agreement to buy Votorantim Cimentos' direct and indirect 75 per cent stake in Shree Digvijay Cement Company Limited (SDCCL) for an undisclosed sum.
 

The Brazilian firm is the largest cement company in Brazil and 8th largest in the world.
 

This acquisition would require completion of a mandatory open offer to the minority shareholders of SDCCL, said the investor.

True North has more than a decade-long experience with investments in the Indian construction and building materials space. It owns and manages two businesses in this space - RDC Concrete (“RDC”), a manufacturer of ready-mix concrete and Robo Silicon (“Robo”), a manufacturer of construction aggregates.

Srikrishna Dwaram, Partner at True North, said, “Votorantim Cimentos has contributed significantly to the strategic initiatives taken at SDCCL over the last few years. This has strengthened its competitive positioning and has greatly improved its operating and financial performance". 

True North firmly believes that SDCCL has a competitive edge and is looking forward to partner with the existing management and employees, he added.

Jorge Wagner, CEO of Votorantim Cimentos (Europe, Africa, Asia) stated, “True North is one of India’s leading private equity firms. We are confident that the firm will add great value by virtue of being not just a mere investor, but as a true business partner, leveraging the already existing strengths at SDCCL. This would certainly bring even more growth opportunities for the company in the days ahead.”

JM Financial Limited is acting as the manager for the open offer.

In 2012, the promoters of Shree Digvijay Cement, a Portuguese cement company called Cimentos de Portugal (Cimpor), had transferred their stake to Votorantim Cimentos as part of their global restructuring strategy. Later, Votorantim gave up its 21 per cent stake to acquire other assets owned by Cimpor around the world, including Shree Digvijay Cement, according to reports.

In 2017-18, Shree Digvijay Cement posted a net profit of Rs 133.7 million over a turnover of Rs 4.24 billion, compared with a net loss of Rs 80.5 million in the previous financial year. In 2012, when the company was taken over by the Brazilian promoters, the net profit was Rs 509.3 million on a turnover of Rs 4.29 billion.

The Brazilian firm, which is the largest cement company in Brazil and 8th largest in the world, owns 75 per cent stake in the Gujarat-based cement company.