Catalist-listed Digilife Technologies has acquired a majority stake in Brimax AAC Products LLP, a manufacturer of sustainable building materials, for INR336.6 million or $4.9 million.
The company, on Sept 30, entered into a sale and purchase agreement (SPA) with Brimax AAC’s shareholders, Dineshbhai Devasi, Badrilal Vanghabhai Devasi, Prabhulal Murji Dholu, Bhavesh Prabhulal Dholu and Nikul Prabhulal Dholu, to acquire 51% of the partnership interest in Brimax AAC. Dineshbhai and Badrilal own 25% each in Brimax AAC, while Prabhulal, Bhavesh and NIkul own 16.68%, 16.66% and 16.66% of the company’s shares respectively.
The proposed acquisition is considered to be a “major transaction” under Catalist rules and will be subject to an approval from Digilife Tech’s shareholders at an extraordinary general meeting (EGM).
The proposed transaction will result in the diversification of Digilife Tech’s core businesses; it is primarily in the distribution of operator products and services, information communications and technology distribution and managed services (IT business) and mobile devices retail services (telecom business).
Digilife Tech is also involved in the management of various types of properties including residential, hospitality, retail and office, industrial (property related assets). The company also has holding investments in properties for rent and capital growth potential.
As at Digilife Tech’s Oct 1 announcement, the company has exited from the telecom business and is in the process of exiting from its IT business, which is deemed to be a “non-strategic and a sunset business”.
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“Following the completion of the disposal of such businesses, it is envisaged that the company may not have any operating businesses. Accordingly, the company has been actively seeking various opportunities which include business relating to the property related assets business which it had obtained shareholders’ approval to diversify into in April 2022.”
Should the acquisition be approved by shareholders, Digilife Tech intends to diversify its business to include the manufacturing, processing, and distribution of a wide range of construction and building materials.
These materials include autoclaved aerated concrete (AAC) blocks and panels, reinforcement panels, fly ash bricks, lightweight blocks, ready-mix concrete, precast products, paving blocks, wall and floor tiles, vitrified tiles, structural lintels, claddings, adhesives, dry mix products, epoxy grout, glass mosaic tiles, sanitaryware, pipes and fittings, plywood, laminates, steel products, roofing sheets and architectural glass solutions.
Digilife Tech foresees the acquisition to allow it to benefit from the growing Indian construction sector, which is poised to be the third largest globally in 2025 with urbanisation and population growth driving demand for housing and commercial spaces.
As at Oct 1, the entire partnership interest in Brimax AAC comprises the fixed capital contribution of INR100,000 and the floating capital contribution of approximately INR412.6 million. The floating capital contribution will be converted into fixed capital prior to completion of the proposed acquisition and will be subject to adjustments per the SPA.
Brimax AAC owns a plot of land in Vadodara, India of approximately 23,515 sqm and is operating a AAC production plant which can produce up to approximately 600 cubic meters per day of AAC block.
The plant has commenced operations since the beginning of 2025 and has generated revenue of approximately INR52.9 million or $0.8 million from Jan 1 to June 30.
As at March 31, Brimax AAC’s book value and net tangible asset is around INR260 million. Its net loss after tax was around INR80.7 million as at the same period.
The proposed acquisition is subject to Brimax AAC’s shareholders obtaining a no-objection certificate from the Housing Development Finance Corporation Bank (HDFC Bank) and Digilife Tech getting the relevant regulatory consent or approvals.
The transaction, which will be funded by internal resources, is expected to be completed on or around Nov 15.
Shares in Digilife Tech closed at 62.5 cents on Sept 30.
