With KKR Help, Clas­sic Stripes Pro­moter Buys Back 51% from PE Firm

The Economic Times - - Companies: Pursuit Of Profit - Our Bureau

Mum­bai: In a unique trans­ac­tion, the found­ing share­hold­ers of auto com­po­nents maker Clas­sic Stripes have re­gained con­trol of his com­pany from the pri­vate equity in­vestor whom he had sold a ma­jor­ity stake to, five years ago. Backed by fund­ing from Kohlberg Kravis Roberts & Co, Mum­bai-based Musale fam­ily has bought back the en­tire 51% that Navis Cap­i­tal Part­ners had ac­quired from them in 2011for .₹ 200 crore. An ad­di­tional .₹ 160 crore has been pro­vided to set­tle for short term li­a­bil­i­ties.

Asia-fo­cused NCP had in­vested $100 mil­lion (.`450 crore ap­prox) in the com­pany and will cash out of the In­dia oper­a­tions but will re­tain the com­pany’s over­seas busi­ness, said sources in the know. Started in 1987 by first gen­er­a­tion en­tre­pre­neur Kishore Musale, Clas­sic Stripes is the sin­gle largest man­u­fac­turer of au­to­mo­tive graph­ics in the world with a pro­duc­tion ca­pac­ity of over 15 mil­lion au­to­mo­tive graphic sets per an­num. The firm has more than 60% mar­ket share in the In­dian OEM de­cal mar­ket.

By virtue of its end-to-end so­lu­tion ca­pa­bil­i­ties, the com­pany en­joys sin­gle-source sta­tus for a host of mar­ket lead­ing au­to­mo­tive mod­els. The client ros­ter of Clas­sic Stripes in­cludes lead­ing OEMs like Hero, Ba­jaj, Yamaha, Suzuki, John Deere, Con­ti­nen­tal, Tata Mo­tors, Mahin­dra & Mahin­dra etc. Clas­sic Stripes is a part of Astarc Group with di­ver­si­fied busi­ness in­ter­ests in in­fras­truc­ture, au­to­mo­bile & elec­tronic so­lu­tions, dairy & agri­cul­ture, re­tail dis­play so­lu­tions, au­to­mo­bile and port sec­tors, and sup­ports a host of char­i­ta­ble causes. o3 Cap­i­tal acted as the sole fi­nan­cial ad­vi­sor and AZB Part­ners was the le­gal ad­vi­sor to the Musale fam­ily.

“We are grate­ful for the sup­port that Navis pro­vided us as a part­ner. We con­tinue to be very ex­cited about the fu­ture of Clas­sic Stripes and are de­ter­mined to serve our cus­tomers in the best pos­si­ble man­ner. Our vi­sion for the growth of Clas­sic Stripes is shared by KKR who has de­cided to sup­port us in this jour­ney.” said Kishore Musale, chair­man of Astarc Group.

While there have been a cases of buy­backs of PE in­vestor stakes by In­dian pro­mot­ers, rarely has pro­mot­ers bought back con­trol­ling in­ter­est from a fi­nan­cial in­vestor.

The re­la­tion­ship be­tween both sides have re­mained frosty in re­cent years.

Musale had even quit in 2014 as the com­pany’s man­ag­ing di­rec­tor al­leg­ing ex­ces­sive in­ter­fer­ence and mis­man­age­ment by Navis Cap­i­tal. Navis was be­lieved to be re­spon­si­ble for sack­ing key em­ploy­ees and brought on board a new chief ex­ec­u­tive who was re­jected by most of the com­pany’s staff lead­ing to ma­jor labour un­rest in the com­pany’s fa­cil­i­ties. This also led to the sack­ing of Pan­durang Choughule, who was the head of hu­man re­sources at Clas­sic Stripes.

ET in Oc­to­ber 2014 had re­ported about the fight be­tween the prin­ci­pal share­hold­ers of the com­pany.

Clas­sic Stripes is the sin­gle largest man­u­fac­turer of au­to­mo­tive graph­ics in the world

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