Private equity firm Warburg Pincus said Tuesday it has acquired a majority stake in Imperial Auto Industries Ltd and its affiliated companies, as it looks to build an auto component firm that can benefit from global supply chain disruptions and growing demand for electric vehicles.
The announcement comes two months after The Capital Quest first reported in January that Warburg was in advanced talks to conclude the deal.
Warburg didn’t disclose any financial details of the deal. But The Capital Quest previously reported that the PE firm would initially pick up a 51% stake in the company and increase it to 70% in a year’s time.
The PE firm said that Imperial, founded in 1969, is India’s largest manufacturer of fluid transmission products for automobile and off-highway sectors. Its product portfolio includes rubber hoses, metal/nylon tubes, hose assemblies, and battery cooling products used in electric vehicles.
The group has 20 factories across India, Germany, and the US, and generates revenue of about Rs 2,200 crore ($285 million).
Warburg said Imperial is making “significant strides” in capturing the large export opportunity presented by recent disruptions of US and global supply chains. It is also playing to the EV trend and developing battery cooling products by leveraging its core capabilities in fluid transmission.
The group will continue to be led by the current CEO and promoter, Tarun Lamba, who will drive the business in partnership with Warburg Pincus, the PE firm said.
Lamba said the investment will help Imperial fund its growth plans, which include capacity expansion, creation of new facilities for domestic and export clients, and acceleration of EV-related product development.
Viraj Sawhney, Managing Director at Warburg Pincus India, said the PE firm plans to leverage the Imperial platform to build a diversified Indian auto components player serving both automotive and off-highway markets including electric vehicles.
EY acted as the sole financial advisor to Imperial.