Paramount Communications acquires UK-based AEI Cables

Cable manufacturer Paramount Communications Ltd has acquired the UK-based AEI Cables in an all cash deal. AEI Cables has a turnover of approximately £65 million (Rs533 crores).

The acquisition would strengthen the consolidated balance sheet of the Indian company and is accretive to the net worth by about INR 110 crore, says Paramount that makes cables for infrastructure sectors including power, railways, telecom and industrial projects.

AEI Cables, wholly owned by the London Stock Exchange listed electronic sensors and components group TT Electronics plc, manufactures cables supplied to the defence, rail, power and mining sectors are specialist cables manufactured with the proprietary know how.

Paramount said it is only infusing Rs25 crore in the acquisition out of the proceeds of its FCCBs, as the acquisition is being substantially funded through borrowings by the company''s new wholly owned UK subsidiary against AEI Cables assets which it has acquired, without recourse to itself.

"AEI Cables is one of the oldest and internationally most reputed brands in the world, with numerous customer approvals and technological strengths," said Sanjay Aggarwal, chairman and CEO, Paramount Cables. "The AEI business has a distinguished history which can be traced back to 1837. One of the key reasons for the acquisition is to access the world-class product development and technical know-how of AEI Cables, especially in the defence sector. Paramount would like to take this product portfolio to India and other markets it operates. We at Paramount are very

Paramount says, after the acquisition it would have an annual turnover of over Rs1,100 crore, with significantly strengthen its product range for infrastructure segments such as railways, mining and power, and defence in India and the UK.

The acquisition would enable faster expansion in global markets in the Far East, Middle East and Africa, where the AEI brand is well established and also access the UK company''s technical know bow to continue developing new range of products to keep its competitive edge in India and internationally.

London- based mid-market advisor, Elara Capital Plc, was Paramount''s sole corporate adviser. This is Elara Capital''s first cross border transaction involving two listed companies.