Japanese Glass Maker Sold for $158 mn

An Indian company, Vedanta, led by Anil Agarwal, has bought a controlling stake in AvanStrate, a Japanese specialist in LCD glass substrates for small medium panels and with products to support substrates up to Gen 8. The stake will be bought from the Carlyle Group, a private equity group, and will consist of 51% of the firm’s stock. The consideration was a nominal amount, but the buyer will take on $151 million of the debts of Avanstrate and extend a loan to the firm of $7 million so the transaction is valued at $158 million. The book value of the firm’s debt is reported to have been $299 million, so there is an assumption that lenders are cutting their losses with the deal.

Avanstrate started in business in 1991 and was known as NH Techno Glass Corp until the end of 2008. The company is reported to have been sold to Carlyle for $560 million.

Image: Avanstrate

Analyst Comment

According to IHS Markit, the company has capacity of around 12.5 million m² which is around 2.3% of the capacity of the industry, although that still makes it the fourth largest after Corning, AGC and NEG and chinese capacity went past the company in 2015.

There has been talk of building a display fab in India, so it is intriguing to speculate where the glass might come from!

The losses that Carlyle have made will not make the display industry more attractive to investors. (BR)