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Pipe maker Astral Poly Technik to acquire Rex Polyextrusion

Pipe and adhesive maker Astral Poly Technik Ltd has agreed to acquire Rex Polyextrusion Pvt. Ltd for Rs 147.50 crore ($21.4 million) in a cash-and-stock deal to expand its product offerings.

Astral said in a stock exchange disclosure it will pick up a 51% stake in Rex Polyextrusion for Rs 75.2 crore in cash and the remaining stake through a share-swap deal.

The deal is subject to statutory and regulatory approvals. The cash part of the deal is likely to be completed within a week.

Sandeep Engineer, managing director at Astral, said the company is entering infrastructure and other related piping businesses through the Rex acquisition.

Chadrashekhar Dandekar, director and promotor of Rex Polyextrusion, said Astral’s vast distribution network will help Rex's products to capture the Indian building material and infrastructure market.

Incorporated in 2006, Rex Polyextrusion makes corrugated and other plastic piping solutions. It is headquartered at Sangli in Maharashtra. Its net sales rose to Rs 169.46 crore in 2017-18 from Rs 146.57 crore the previous year.

Astral Poly Technik has piping manufacturing units at Santej and Dholka in Gujarat, Hosur in Tamil Nadu, Ghiloth in Rajasthan and Kenya. It makes pipes for plumbing, industrial usage, drainage, fire protection and agriculture.

The company’s consolidated net revenue rose to Rs 2,106 crore in 2017-18 from Rs 1,894.7 crore the previous year. Its profit after tax increased to Rs 175.7 crore from Rs 144.6 crore.

Investment bank Ambit Corporate Finance acted as the exclusive financial adviser to Astral for this transaction.

In a recent deal in this segment, Belgium-based Aliaxis SA agreed to acquire the 40% stake it doesn’t already own in joint venture Ashirvad Pipes from the partner Poddar family.

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