Zephyr Peacock, an India-focused private equity firm, has acquired a 25 per cent stake in Pennar Engineered Building Systems Limited (PEBS) for Rs 50 crore.
The investment is targeted to help the company achieve its goal of reaching the Rs 1,000-crore revenue mark in the next three years, the company said. PEBS is a steel pre-fab buildings maker started three years ago. Currently focused on southern and western markets, the company plans to expand its footprint into other parts of the country by setting up a 30,000-tonne capacity plant in north India.
This is the first private equity investment in PEBS, though its parent company — the Rs 1,100-crore Pennar Industries Limited — had received a couple of private equity investments in the past.
Under the agreement, PEBS would allot compulsorily convertible preferential shares to Zephyr Peacock. These will be converted into equity at a later date, according to Pennar Industries chairman Nrupender Rao.
Following the investment, Mukul Gulati and Vishal Dixit from the private equity firm will join the PEBS board. “By replacing traditional construction with pre-engineered steel systems, PEBS is helping the infrastructure sector address three challenges that matter the most today -- capital, labour and time. PEBS is an excellent addition to our portfolio of fast growing businesses that leverage knowledge to positively impact important segments of the economy and society,” said Zephyr director Vishal Dixit.
Zephyr Management, LP, is a global private equity and marketable securities firm founded in 1994 and its portfolio of investments across developed and developing world stands at Rs 1,300 crore. Its Indian arm provides growth capital and management expertise to fast growing, young businesses in sectors, including life sciences, financial services, IT and infrastructure ancillaries and services, according to a company statement.
PEBS proposes to achieve a compound annual growth rate of 40 per cent in the next three years through aggressive expansion in international emerging markets, solar infrastructure, high-rise commercial buildings and cold-form building systems. It expects to post Rs 330 crore in revenues for 2012-13 and Rs 500 crore by next year.
“Within as short span of three years, PEBS Pennar has managed to evolve into a premier provider of custom-designed building solutions to major industrial and corporate houses in India and Africa. It is our goal to achieve Rs 1,000 crore in sales within the next three years,” Rao said.
The company’s current order book stands at Rs 230 crore. It had so far executed projects worth over Rs 750 crore for L&T, UltraTech, ACC, ABB and Schneider Electric among others, according to him.
