Re­struc­tur­ing

The Economic Times - - Special Feature - N SHIVAPRIYA

Com­pany: In­vestor: Ac­tis In 2010, Ac­tis sold health and per­sonal care prod­uct firm, Paras Phar­ma­ceu­ti­cals, to Reckitt Benckiser for Rs 3,260 crore. The PE firm sold its 63% stake along with other in­vestors and pro­moter, Girish Pa­tel, walk­ing away with a four-bag­ger in about four years. It is a clas­sic PE story: fund brings in pro­fes­sional man­age­ment, re­struc­tures op­er­a­tions, ex­its at a pre­mium with ben­e­fits to all stake­hold­ers. Ac­tis is look­ing to shape an­other such story with Phoenix Lamps, where it holds 70%. It has ac­quired a Euro­pean dis­trib­u­tor of au­to­mo­tive lamps and hived off Phoenix’s loss-mak­ing gen­eral-light­ing (CFL) busi­ness. In its ear­lier form, the CFL busi­ness was a sup­plier to firms like Philips and Wipro. Ac­tis repo­si­tioned it as a con­sumer play and as a com­peti­tor to those very firms. In Au­gust 2013, Ac­tis ac­quired the CFL busi­ness through a bid­ding process, for Rs 160 crore, and took it pri­vate. The sale helped Phoenix re­turn to prof­its. “The two (au­to­mo­tive and gen­eral light­ing) were fun­da­men­tally dif­fer­ent businesses, re­quir­ing dif­fer­ent people,” says Shomik Mukher­jee, part­ner at Ac­tis and di­rec­tor on the Phoenix board. “One needed people with busi­ness de­vel­op­ment skills and abil­ity to open doors. The other needed people with sales and dis­tri­bu­tion, and mar­ket­ing and brand­ing skills.”

Prior to this, Phoenix had ac­quired the Euro­pean dis­trib­u­tor of its au­to­mo­tive lamps, de­spite its in­ex­pe­ri­ence in the area. “It was a bold bet,” says Mukher­jee. It was one that Ac­tis had to take be­cause the dis­trib­u­tor was in fi­nan­cial trou­ble, and Phoenix was faced with the prospect of fall­ing sales and un­sold in­ven­tory.

With the ac­qui­si­tion, it in­her­ited two in­ter­na­tional brands, Trifa and Luxlite, with a pres­ence in Europe, Latin Amer­ica and Mid­dle East. Ac­tis now plans to take Phoenix to new mar­kets like China and Brazil. In China, where there are sev­eral US and Euro­pean car­mak­ers, Phoenix plans to po­si­tion its au­to­mo­tive lamps as an al­ter­na­tive to cheaper Chi­nese makes and more ex­pen­sive ones from Philips and Os­ram. “Now it is seen as a Ger­man brand, not an In­dian brand,” says Mukher­jee. “That’s a huge ad­van­tage.” And, in the last 12 months, the Phoenix stock is up 70%.

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