Electrical products maker Polycab India Ltd said Friday it has agreed to acquire Silvan Innovation Labs Pvt. Ltd, a company that makes home and office automation products.
Polycab will invest Rs 10.2 crore ($1.38 million) to buy Silvan’s shares and spend around Rs 8 crore to clear the target company’s outstanding liabilities, it said in a statement.
The acquisition will strengthen Polycab’s R&D and innovation capabilities, the company said, adding that it will use its distribution network and manufacturing expertise to grow Silvan’s internet of things-based solutions.
Polycab chairman Inder T. Jaisinghani said the company aims to become more consumer-centric. “It is a fantastic addition to our IoT portfolio and aligns with our strategy to address evolving consumer needs with new age innovative solutions,” he said.
Polycab makes electrical wires, cables and fast-moving electrical goods such as electric fans, LED lighting and luminaires, switches and switchgears, solar products and conduits, and accessories.
The company counts International Finance Corporation as an investor with a stake of 2.54%. IFC, the World Bank’s private-sector investment arm, had invested a total of Rs 400 crore in Polycab in 2009 and 2012.
IFC sold some stake in Polycab at the time of its initial public offering two years ago and divested more stake earlier this year.
Bengaluru-based Silvan was founded in 2008 by four electronics and embedded systems domain veterans. Three of them—Giridhar Krishna, Mohan Gopalakrishna and Ajay Gupta—will continue with Polycab after the acquisition.
Silvan provides automation offerings for homes, offices, banks, retail outlets and hotels. It says it has installed over 100,000 devices in more than 8,000 homes and offices.
Its IoT-based based automation products include lighting management system, temperature control devices and security devices. It also offers an application and cloud platform.
Silvan clocked over Rs 9.2 crore in sales for 2018-19 but this slumped to Rs 3.4 crore for the year through March 2020. It has an order pipeline of Rs 100 crore. The coronavirus pandemic has hurt its business, Polycab said.