Bangalore-based Datanet Systems Ltd is acquiring the printer business of WeP Peripherals Ltd (formerly Wipro ePeripherals Ltd), one of the largest employee-owned firms in India and a key shareholder of the public-listed Datanet, the company has disclosed in a statement to Bombay Stock Exchange today.
In a pure stock transaction, Datanet will issue 11.7 million shares to WeP Peripherals' shareholders to buy the business.
Datanet Systems' scrip closed at Rs 14.5 a share on Monday, down 1.69 per cent from the previous close in a weak Mumbai market.
At this price, the deal is valued at around Rs 17 crore ($3.2 million).
Incorporated in 2000, WeP Peripherals designs, develops, manufactures and services printers and UPS batteries. It offers dot matrix, line matrix, retail POS, retail billing, laser and passbook printers, as well as consumables and print heads. The company caters to government and banking sectors, small &medium businesses, large corporate houses and even retail stores. It has two manufacturing facilities in Mysore (Karnataka) and Baddi (HimachalPradesh), with the capacity to produce more than 650,000 products and 1 million consumables per annum.
The firm was set up by Ram Agarwal under the Wipro umbrella nearly 10 years ago and was later spun out as a separate private entity. Bulk of WeP Peripherals' equity is held by its own employees, besides the employees of the IT giant Wipro Ltd and its business associates.
Incidentally, WeP Peripherals owns 18 per cent stake in Datanet and is a co-promoter of the company. Agarwal doubles up as the chief of both Datanet and WeP and is one of the largest shareholders of Datanet.
Datanet Systems Ltd (formerly Datanet Corporation) provides managed printing solutions and document management solutions in India. The company offers laser printers, multifunction devices, colour printers, dot matrix and line matrix printers, deskjets, scanners, photocopiers and ID card printers. Its keycustomers include IT, BPO, financial services, manufacturing and healthcare enterprises.
In another deal in this space, Kilburn Office Automation Ltd entered into an agreement with Kyocera Mita India Pvt Ltd in August this year to sell its office equipment business for an undisclosed sum.