Air-cooler manufacturer Symphony sees huge market in the US and Australia, said Nrupesh Shah, executive director.

Symphony has signed an agreement to acquire 95 percent stake in Climate Technologies, Australia’s leading manufacturer of cooling and heating appliances. The acquisition will be executed at a valuation range of Rs 201 - Rs 22I crore depending on the achievement of FY18F EBITDA (June ended), the company said.

Talking about the deal, Shah said, “Treasury is in excess of Rs 450 crore, so it can be funded entirely from internal accruals, but for better financial leverage to ensure that there is a natural hedge and also to get some treasury margin we have decided to fund almost Rs 125 crore from debt which we are raising at about 5.35 percent against our treasury return in liquid mutual fund or AAA bonds of 7 percent plus.”

Almost Rs 800 is being funded by equity but at a net-net level Symphony will remain as a debt free company and based on its business plan conservatively it expect that the debt repayment should take place from the cash flows of the of the Climate Technologies, he said.

On margin front, he said operational margin of Climate Technologies is 40 percent, while Symphony's margin profile is at 50 percent.