Fairfax signs another control deal in Indian engineering sector

 Fairfax signs another control deal in Indian engineering sector

Fairfax India Holdings Corp, an India-dedicated private equity-style investment firm led by Canadian billionaire Prem Watsa, has struck its second buyout in the Indian engineering sector within four months.

The firm has signed a deal to buy a 70% stake in Jaynix Engineering Pvt Ltd for Rs 245 crore ($33 million).

The transaction is subject to customary closing conditions and is expected to close in the current quarter, the Toronto Stock Exchange-listed firm said.

Jaynix manufactures non-ferrous electrical connectors and electrical assemblies. It is a tier-1 supplier to major electrical equipment manufacturers in North America and Europe. It operates three plants—one in Vadodara, Gujarat and two in Nashik, Maharashtra.

Gujarat-headquartered Jaynix was founded by Nikhil Diwakar and Ninad Diwakar. They will continue as managing director and executive director, respectively, upon closing of the transaction.

Nikhil Diwakar, managing director of Jaynix, said: “Fairfax India’s long-term orientation and decentralized management approach will help us accelerate our next phase of growth and continue to create value for our customers, employees and other stakeholders.”

Watsa, chairman of Fairfax India, said the investment firm was impressed with the continued growth and operational efficiencies of the business under the founders.

In September, Fairfax signed a $66-mn deal to pick up a 67% stake in Maxop Engineering Company Pvt Ltd. Fairfax India had said it would initially spend Rs 222 crore for a 51% stake in Maxop and then invest up to Rs 266 crore for an additional 16% equity interest.

Maxop is a precision aluminium die casting and machining solution provider for aluminium die casting components used by the automotive and industrial sectors. It has customers in India, Asia, North America and Europe.

The latest deal comes even as Fairfax India is looking at multiple exit moves including a plan to list its infrastructure holdings arm on India’s stock exchanges to monetize its five-year-old investment in the country’s third-largest airport. It is also looking to partially exit Seven Seas Shipping via a proposed initial public offering and recently monetised its investment in a business services company.

Since 2012, Fairfax has invested or acquired several other companies in India across sectors such as business services, airports, chemicals, banking and insurance. Its India portfolio includes the National Stock Exchange, Quess Corp, Digit Insurance, Bangalore International Airport, IIFL, Sanmar Chemicals, CSB Bank and Seven Islands Shipping.

Vivek Sinha

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