Japanese firm Nihon Nohyaku is acquiring 74 per cent stake in Hyderabad Chemicals Ltd, a medium-sized agrochemical manufacturer, as per a press release. The company did not disclose the value of the deal, which is expected to close by January 2015.
The remaining 26 per cent stake will be held by the promoters of the company.
VCCircle was the first to report that a strategic deal is brewing in the Hyderabad-based pesticides manufacturer.
Hyderabad Chemicals matches Nihon's business strategy for establishing direct sales system in India where the agro-chemical market is expected to grow. The acquisition will help boost its business in other countries also, the company said.
Hyderabad Chemicals was established in 1971 by first generation entrepreneur Ramesh Gandhi for providing crop protection chemicals to farmers. Its plants and formulation facilities at Balanagar and Pashamylaram in Hyderabad and Jammu manufacture a range of technical grade pesticides and pesticides formulations. The formulations produced by the company include emulsifiable concentrates, suspension concentrates, wettable powders, water soluble powders, encapsulated granules and water dispersible granules.
It operates through its group companies Hyderabad Chemicals Products Limited (HCPL) and Neo Seeds India Limited (NSIL) to manufacture products that include Alphakill, Angel, Bifors, Bijili, Conzol and Echonil.
The company recorded a turnover of $65 million (Rs 400 crore) for the year ended in March 2014. Nihon is engaged in manufacturing and sale of safe and superior agrochemicals. The company has been expanding the business in fields like chemical products, pharmaceuticals and animal health products.
While KPMG advised Nihon on the transaction, EY's M&A advisory team was the exclusive financial advisor to Hyderabad Chemicals.
(Edited by Joby Puthuparampil Johnson)