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