The acquisition will help UGRO grow its business mix by about 30% and add approximately Rs 150 crore of incremental profit on an annualised basis. Profectus is a Mumbai-based MSME and school financing non-bank lender.
“This strategically priced acquisition deploys our equity raise to achieve instant scale and Rs 115 crores cost savings and annualized incremental profitability of Rs 150 crores thus boosting ROA by 0.6–0.7%,” UGRO founder cum managing director Shachindra Nath said.
UGRO said it would make the payment towards the all-cash deal in one go using the proceeds from its recently concluded Rs 400-crore rights issue. The company may go for a preferential issuance of compulsorily convertible debentures for the balance sum.
UGRO had Rs 12000 crore assets under management while Profectus had Rs 3500 crore at the end of March. Profectus, with its fully secured loan portfolio, will become a wholly-owned subsidiary of UGRO.
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The company has executed a share purchase agreement with the existing shareholders of Profectus Capital to acquire 100% of the shares of the latter. The acquisition is subject to regulatory and other standard approvals.
