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ICICI Direct Report
V-Guard Industries Ltd. has signed a definitive agreement to acquire 100% stake in Sunflame Enterprises Ltd. for a consideration of Rs 660 crore, on a cash-free and debt-free basis.
In the last three years, Sunflame's revenue grew at 15% compound annual growth rate (higher than industry growth of ~10-12%) supported by new product launches and geographical expansions.
It will finance this acquisition through a mix of debt and internal accruals (V-Guard had net cash of ~Rs 151 crore as on September 2022).
With the offer price, Sunflame is valued at 1.9 times FY22 sales and 20 times FY22 earnings.
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