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Pidilite acquires consumer & bazaar business of Araldite for Rs 2,100 Cr
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SME Times News Bureau | 29 Oct, 2020
Pidilite Industries is acquiring complete interest in US-based Huntsman
Group's Indian subsidiary Huntsman Advanced Materials Solutions Private
Limited (HAMSPL) for a consideration of about Rs 2,100 crore to
consolidate its leadership position in the domestic adhesive market.
The
board of Pidilite Industries approved a definitive agreement with
Huntsman Group for acquiring 100 per cent stake in one of their
subsidiaries in India at its meeting on October 28.
This deal is
for a cash consideration of about Rs 2,100 crore, excluding working
capital and other adjustments, subject to certain preconditions being
met prior to the closing of the transaction, a company statement on the
transaction said.
The target company HAMSPL manufactures and
sells Adhesives, Sealants and other products under well-known brands
such as Araldite, Araldite Karpenter and Araseal in India. In calendar
year in 2019, the company's business revenue was approximately Rs 400
crore.
The acquisition pitch by Pidilite includes HAMSPL's Indian
Sub-Continent business as well as includes a Trademark licence for
Middle East, Africa and ASEAN countries.
Huntsman Group is a
leading global producer of differentiated organic chemical products.
Under the terms of the agreement, Huntsman will receive approximately 90
per cent of the cash consideration at closing and balance approximately
10 per cent under an earnout within 18 months if the business achieves
sales revenue in-line with 2019. The transaction is expected to close
by next week.
HAMSPL has a nation-wide distribution network and a strong presence in Retail Trade.
Commenting
on the acquisition, Apurva Parekh, Executive Director, Pidilite
Industries Limited, said: "Araldite is an iconic brand and a market
leader in Epoxy Adhesives in India. We are thankful for all the support
extended by the Huntsman group and we are confident that our
association will remain strong going forward as well."
Bharat
Puri, Managing Director, Pidilite Industries Limited, further commented:
"With this acquisition, Araldite will add to the already very strong
portfolio of Pidilite's adhesive and sealant brands and will complement
our retail portfolio. We are confident that this acquisition will
create significant shareholder value through strong revenue and cost
synergies. We look forward to warmly welcoming the HAMSPL team and the
trade and business partners to the Pidilite family."
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