Prince Pipes acquires renowned Bathware Brand Aquel and Plant located at Bhuj, Gujarat

Prince Pipes and Fittings Limited (PPFL), one of India's largest integrated piping solutions providers, today announced that it has signed an Asset Purchase Agreement (APA) with Klaus Waren Fixtures Pvt Ltd., for the acquisition and assignment of identified assets for Rs. 55 crores. The acquisition will be funded through internal accruals and is structured in two phases.

The first phase shall constitute the acquisition of the iconic Aquel brand along with the acquisition of moulds and dies, on an immediate basis. The second phase will be in relation to the acquisition of the assets comprising of land parcel, buildings, machinery and manufacturing equipment, office furniture and fixtures situated at Klaus Waren's plant in Bhuj, Gujarat. The transaction shall be consummated subject to the receipt of regulatory approvals. The total built up area is ~1,10,000 sq ft whereas the land parcel area spans ~8 acres, which could be used for future expansion.

In a highly evolving and dynamic market, the Aquel brand has established itself as a key player in Western, Central and certain parts of South India, with its wide range of products. It has captured the attention of homeowners, interior designers, architects and builders. Aquel brings an extensive range of scientifically engineered products, encompassing faucets and bathroom accessories, available in various designs, colors, and functionalities, to cater to diverse preferences and purposes. There are currently 9 ranges and 250 SKU's being produced under the Aquel brand.

The production facility follows the best industry practices in its manufacturing process and ensures accuracy, efficiency, and consistency in the production of the products. The brand Aquel introduced advance manufacturing technologies like, India's first fully automated chrome plating plant, first bath brand to introduce unique finishes. Also, the first bath brand to introduce mouth operated cocks.

Overall addressable market for Prince Pipes

As per market estimates, the overall market size of the Bathware segment is expected to be ~Rs.18,000 crores with the organized market at ~65% and unorganized market at ~35%. In the Bathware segment, the market for faucets is estimated to be in the range of Rs.11,000 - 12,000 crores and the market for sanitary products is in the range of Rs. 7,000 - 8,000 crores. With this transaction, the overall addressable market for Prince would be over ~Rs. 60,000 crores.

Through this transaction, Prince would be able to increase its participation and contribution to the high growth real estate market by being present across the plumbing and bathing segments. With the acquisition of the Aquel brand, Prince aims to become a prominent player in the Bathware segment, replicating the success it has achieved in its other segments.

The consultants for the transaction are as follows: (i) Deloitte has assisted in the conduct of the tax due diligence, (ii) Knight Frank India Pvt. Limited has assisted in the conduct of the technical assessment; and (iii) Luthra and Luthra Law Offices India assisted in the conduct of the legal due diligence, as well as in relation to the negotiation, drafting and finalization of the transaction documents, and other related matters.

Commenting on the development, Mr. Nihar Chheda, VP Strategy, Prince Pipes, said, "We are excited to have the acclaimed Aquel brand as a part of Bathware portfolio and our products henceforth will be branded and retailed under the brand- 'Aquel by Prince'. The transaction is a strategic and financial fit that will bring significant synergies and market opportunities across our segments. It will catapult the performance of the Bathware segment giving us direct access to an iconic brand along with state-of-the-art facility and creating a larger distribution channel in major markets across India.

Aquel has a legacy brand equity with homeowners, interior designers, architects and builders across India. Their technically advanced plant supported by modern manufacturing processes and robust quality control infrastructure, coupled with the operational strength of Prince, make this opportunity exciting as we look to scale our Bathware portfolio. In the high growth Indian Bathware market, Aquel provides a strong platform which is highly complementary to Prince's growth plans."

Shares of Prince Pipes And Fittings Limited was last trading in BSE at Rs. 529.85 as compared to the previous close of Rs. 529.65. The total number of shares traded during the day was 24937 in over 1784 trades.

The stock hit an intraday high of Rs. 538.00 and intraday low of 527.70. The net turnover during the day was Rs. 13270902.00.

Source : Equity Bulls

Keywords

PrincePipesAndFittings INE689W01016 Acquisition AssetPurchase KlausWarenFixtures BathwareBrand Aquel Plant Bhuj Gujarat