Tile maker Somany Ceramics today said it has acquired 26% stake in Gujarat-based Commander Vitrified (CVPL) for Rs 3.25 crore.
Consequent upon this deal, Somany shall have 100% access to the CVPL's manufacturing capacity of 2.65 million square metres per annum of polished and glazed vitrified tiles, the company said in a statement here.
As per a Memorandum of Understanding signed yesterday with CVPL and its promoters, Somany has an option to further increase its stake to 51% in future, it said.
"This strategic investment presents a lot of opportunity for Somany in the current landscape of the Indian ceramic industry. This move is a step towards realising Somany's growth vision," Somany Ceramics Joint Managing Director Abhishek Somany said.
The production on the state-of-the-art Italian plant of CVPL in Morbi, Gujarat, will commence by May-end and will be dedicated towards manufacturing of large format tiles.
"Value-added large format tiles have a huge demand globally. We will drive an additional annualised revenue of about Rs 100 crore from the CVPL plant. We are looking forward to many such robust acquisitions in the coming future," he said.
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Post acquisition, the annual production capacity of Somany will increase to 35 million square metres per annum, inclusive of the contract manufacturing capacity, the statement said.
At present, Somany has a strong country-wide operational footprint with a wide distribution network, which includes a prudent mix of 1,500 dealers and 9,000 sub-dealers and 15 company-owned showrooms in 33 states, it said.