A consortium of investors, put together by
The transaction was completed subsequent to an internal restructuring whereby CSOL's enterprise value was pegged at over
CSOL, which began operations in 2007, is a BOI-registered company and operates out of a two-acre facility in Kadawatha. The company manufactures superior performance cables customised to specific applications, which are exported to customers worldwide. The company generates 95% of its revenue from exports, with key clients in the US, European, Indian and Australian markets.
The product portfolio offers a wide range of cables from bare conductors to specialty cables. While key industry segments (automotive, loadcells, solar, electronics and telecoms) are sizeable and offer strong organic growth, the company has also developed strategic relationships with key customers who have a strong presence in the respective end markets.
The company acquired Harness Solutions in 2017, allowing the company to move further down the supply chain and uniquely position itself as a one-stop shop for its clientele while adding to its capacity to sustain mid- to high-teens topline growth over the next three-four years.
CSOL has been able to differentiate itself from its peers and generate superior margins and ROEs in the high 20s driven by strong R and D capabilities and the customised nature of its products. Based on CSOL's performance over the first three quarters of fiscal year 2019/20, the company is on track to almost double its topline and more than double its net profits compared to three years ago.
In addition, despite being a mid-sized manufacturer, CSOL has made a conscious effort to balance carbon emissions and ensure a sustainable operating environment. In this regard, the company reached carbon neutrality a few months ago through the completion of the second phase of its roof top solar project.
Commenting on the acquisition, ACL Cables Managing Director
We are also delighted to partner Tempest, which put together this transaction, and the management team led by Rune Flinth and
Tejwani sees value addition to CSOL by being a part of the largest cable manufacturing group in
Tempest PE Managing Director Chehan Perera added:
'We see significant room for CSOL to scale up its operations over the next few years through targeted expansion into new regions, new major client wins and deepening the wallet share of its existing customer base. What is also compelling is that CSOL's top three customers have been growing in the high teens over the past few years and we see sustained momentum from them going forward. While manufacturing is not a key focus area for Tempest, we were impressed by the company's management team led by Rune Flinth and
'We were also very pleased that ACL agreed to lead our consortium as we see significant synergies and potential cross-selling opportunities between the two groups. There is little, if any, overlap in products and customers between the two.'
A key highlight of the acquisition is that the two main founders of the company - Chairman Flinth and Managing Director Tejwani - will continue to play an active role in the company, retaining the same positions.
CSOL is expected to make a net profit of approximately
© Pakistan Press International, source