Astral Poly Technik Ltd, which manufactures and markets chlorinated polyvinyl chloride (CPVC) plumbing system, is acquiring 76 per cent equity stake in Kanpur-based specialty chemicals manufacturer Resinova Chemie Ltd for Rs 212.8 crore (around $34 million), as per a stock market disclosure.
Resinova Chemie is valued at Rs 280 crore (nearly $44.7 million) with the transaction.
VCCircle was the first to report that Resinova Chemie is looking to sell controlling stake in the company in a deal that will value it at around Rs 300 crore.
“In high growth Indian adhesive market, the Resinova acquisition provides a strong platform which is highly complementary to Astral's strengths. We see tremendous growth opportunities and are excited with the prospects to create lasting value for our shareholders,” said Astral's managing director Sandeep Engineer.
"Combined with Astral's presence in international markets, thrust will be on using technical strength and distribution network of both companies to harness the potential of this business,” said Vijay Parikh, managing director of Resinova.
The acquisition is Astral Poly's second in the adhesive space this year. In August, Astral had acquired an 80 per cent stake in the UK-based adhesives and sealants manufacturer Seal It Services Ltd for around Rs 44 crore.
Started as a specialty chemicals manufacturer in 1995, Resinova Chemie has evolved into a manufacturer of adhesives and sealants, construction chemicals and industrial maintenance products. For the 12 months ended on September 30, 2014, Resinova generated Rs 218 crore in revenues.
Its products include bondcrete (water thinnable sealer), bondgrip, bondgum, bondinsul, bondtite, bondtite artificial jewellery, bondtite fast and clear, bondtite gel, bondtite handicraft, bondtite super strength, bondtite uniweld, bondtite white paste and bondtite wood. It has a supply chain network of 1,200 channel partners, serviced by its 11 offices across the country.
Ambit Corporate Finance was the exclusive financial advisor; PwC was the financial due diligence advisor; and Khaitan & Co was the legal advisor to Astral. While Yes Bank was the exclusive financial advisor, law firm IndusLaw acted as legal advisor to Resinova.
Astral’s shares closed the day at Rs 403.10, down 0.99 per cent on BSE in strong Mumbai market on Friday.
Early this month WestBridge Capital part exited from Astral with multi-bagger returns.
(Edited by Joby Puthuparampil Johnson)