KDDL acquires Swiss watch company Estima AG
The Board of Directors of KDDL Limited has approved the acquisition of Estima AG, a Swiss watch hands manufacturing company through its subsidiaries Pylania SA and special purpose vehicle Kamla International Holdings SA.
The current turnover of the target entity, i.e. Estima AG is 1.8-2.0 million Swiss Francs. This acquisition will help KDDL to capture additional market share of customers in the European market serviced by Estima. The cut-off date for this acquisition set by the new management is January 7, 2019. The consideration includes payment of 4,00,000 Swiss Francs in cash for 100 per cent holding of Estima by KDDL.
Estima AG was a competitor of KDDL in the business of watch hands manufacturing. The company was established in 1924, in Switzerland. It is a leading supplier to Swiss and other European watch brands operating in the mid-priced segment. However, in the last 10 years, Estima had lost market share by failing to cope with the changing business conditions, leading to a decline in turnover and mounting losses. But the company's goodwill and valuable production infrastructure will help KDDL establish a foothold in Switzerland.
Considering the correction seen in the market led by the resignation of RBI Governor and state election results, stocks across the board were trading in red and KDDL was not an exception. The stock of KDDL opened gap-down at Rs. 452 per share, which had closed at Rs. 500 on Monday. However, some recovery is seen, and the stock is trading currently at Rs. 490 levels.