Godrej Agrovet Ltd, a subsidiary of Godrej Industries Ltd, has raised its holding in agrochemicals maker Astec LifeSciences Ltd by picking up additional 6.99 per cent equity stake in an open offer for around Rs 33.54 crore (approximately $5 million).
With this, Godrej Agrovet now owns 52.28 per cent equity stake in Astec LifeSciences.
In August this year, Godrej Agrovet had struck a deal to acquire a majority stake in Astec LifeSciences for at least Rs 185 crore ($28 million).
It said that it will initially acquire 45.29 per cent stake from Astec LifeSciences’ promoters for Rs 167 crore ($25 million).
The acquisition triggered a mandatory open offer.
As per the open offer, Godrej Agrovet offered to buy up to 5.06 million shares, representing an additional 26.05 per cent, for Rs 246.6 each from the public shareholders aggregating around Rs 125 crore. It had said if the open offer is not successful and it fails to get a majority stake, it would buy more shares from the existing promoters of the firm.
In the open offer, Godrej Agrovet managed to acquire an additional 6.99 per cent equity stake or 1,360,491 equity shares.
Started in 1994, Astec LifeSciences is into agro chemicals and pharma ingredients. It has three plants at Mahad besides a R&D unit on the outskirts of Mumbai.
The deal will particularly boost the agri-inputs business unit of Godrej Agrovet where it boasts of a strong market share in plant growth promoters, soil conditioners and cotton herbicides with a pan-India distribution channel of over 6,500 distributors.
Godrej Agrovet also has operations in areas like animal feed (where it is the largest manufacturer of compound feed in India, producing more than 1.1 million tonnes of feed and nutrition products for dairy cattle, poultry and aquaculture annually), oil palm plantations, hybrid seeds and processed poultry, where it runs a JV firm Godrej Tyson Foods.
Godrej Tyson Foods is the second-largest player in the processed poultry segment in India and known for two key brands—Real Good Chicken and Yummiez.
The firm had roped in Singapore government’s investment firm Temasek as a shareholder in December 2012. Temasek invested Rs 572 crore ($105 million then) for a 19.9 per cent stake in Godrej Agrovet through a combination of primary and secondary investment components. This is the single-largest alternative investment in the agri-business space in India.
KPMG Corporate Finance acted as exclusive financial advisor to Astec LifeSciences and its promoters for this transaction. Kotak Mahindra Capital advised Godrej Agrovet and is also managing the open offer.