In The board of directors of Smartlink Network Systems Ltd. has granted its approval to the company to enter into a Business Transfer Agreement (BTA) with Schneider Electric India Pvt. Ltd.for the sale of Smartlinks Digilink Business to Schneider for a consideration of Rs. 5,030 million payable in cash.
The Digilink Business comprises of the passive networking business including the manufacturing, marketing and sale of structured cabling products.
The Digilink Business had sales of about Rs.1,550 million for the twelve months ended 31st December 2010 and is being sold on a slump sale basis to Schneider as a going concern.
The transaction would primarily include the transfer of the Digilink brand and trademarks, manufacturing facility at Goa, distribution network and the employees relating to the business.
The company has agreed to a non-compete condition for a period of 5 years for the passive networking business. The transaction is subject to shareholder approval and other customary conditions.
According to K. R. Naik, Executive Chairman of Smartlink, We are pleased to enter into this agreement as the transaction recognizes the value of Digilinks pre-eminent position in the structured cabling business, including the strengths of the brand, the strong network, support and dedication of our distributors and last but not least, a well qualified, capable and motivated workforce.
The transaction is mutually beneficial, as it unlocks significant value for the existing shareholders of the company while Schneider gets access to a robust brand and distribution infrastructure to further enhance its presence in the network connectivity business.
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