The Schoeller Litvinov acquisition will be EPS accretive, says Mukund Choudhary, MD, Spentex Industries.

Choudhary added that the deal is to be finalised in Q2 and the acquisition will be completed by 18July.

Excerpts from CNBC-TV18''s exclusive interview with Mukund Choudhary:

What do you stand to gain out of this acquisition? What are the synergies emerging out of it?
The enterprise value that we are paying for this company is €25 million and apart from that, we are actually getting net current assets of €9 million along with the company, for which we are not making any payments. So our effective pay out is only about €16 million. Last year, this company did EBITDA of about €6 million, so we have got it at a good valuation.

Now, this company is amongst the top yarn manufacturers in Europe and has a kind of a ''made-in-Europe'' strategy and a label and has a very good brand name on its quality products in Europe.

The main reason is that, our products and their products do not conflict. The product range that they produce over there is totally different from the product range that we produce in India or in Uzbekistan. So we do not compete with each other, we gain to take advantage from the products they are making. We''ll learn to make those products and if we are able to integrate the two companies and play on the strengths of both the companies, we will have additional advantages.

So it is EPS accretive for sure; give us some details about the financials of this company?
Last year, this company did a topline of about €54 million and did an EBITDA of about €6 million. So those are the main financials they did last year.

Is this acquisition absolutely complete? Will you see the revenues from this acquisition come into your books next quarter?
We signed the agreement on Saturday, 30 June, right after our board approved this acquisition and the transaction will be closed by 15 July, or 18 July, but we have access to all the revenues and all the profits from 1 July, onwards. So yes, we will add this quarter in consolidation from Schoeller, but there is also a holiday season in Europe coming up in this quarter. So this quarter will not be the same as last quarter, because of the holidays in Europe as the factory be shut for a couple of weeks during the holidays.

Any more acquisitions that we may see?
It is purely opportunity-based; you cannot put a business plan in front for acquisition.

Any areas that you have identified?
We have identified, we are always in discussions, but everything does not materialise.