The promoter group of Excel Crop Care Ltd, the Shroff family, has entered into a definitive agreement to sell its 24.75% stake in the agro-chemicals firm to Sumitomo Chemical Company Ltd for Rs 343 crore ($51 million).
Sumitomo Chemical will also acquire around 19% in Excel Crop from private financial services firm Ratnabali Group for around Rs 263 crore ($39 million).
These deals have been struck at Rs 1,259.36 a share, thus valuing Excel Crop at around Rs 1,386 crore.
In a stock market disclosure, it was noted that the Japanese firm has also made a mandatory open offer to the public shareholders of Excel Crop to purchase up to 30% more share for as much as Rs 415.8 crore ($62 million).
VCCircle had first reported in January that the Shroff family was looking to sell its stake in Excel Crop Care and had hired Standard Chartered as a banker for the process.
The Shroff family started chemicals and agrochemicals firm Excel Industries Ltd in 1941. The agrochemicals business of this company was demerged in 2003 to create Excel Crop Care to drive growth for the chemicals and agrochemicals units independently.
The Shroff family has now decided to focus on speciality chemicals, pharmaceutical intermediates, pharmaceutical actives, performance chemicals and environment and biotech products as a primary focus for its future activities.
Dipesh Shroff, managing director at Excel Crop Care, said that Sumitomo Chemical has the right resources and expertise to lead the Indian company in the next phase of growth.
Ray Nishimoto, director and president of health and crop sciences sector at Sumitomo Chemical, said that Excel Crop’s extensive distribution network in India will complement the Japanese firm’s growing presence in India and create opportunities for Sumitomo’s proprietary products to penetrate into this key agrochemicals market. Also, Excel Crop’s robust off-patent product portfolio and low-cost manufacturing facilities will enhance Sumitomo’s capabilities, Nishimoto said.
Standard Chartered acted as the primary financial adviser, Lodha Capital as co-adviser and AZB & Partners acted as legal adviser to the Shroff family and Ratnabali Group.
BMR Advisors acted as the sole financial adviser to Sumitomo Chemical. Kojima Law Office, Shardul Amarchand Mangaldas & Co and BMR Legal acted as the legal advisers to the Japanese firm.
Shares of Excel Crop Care rose 1% to Rs 1,234.05 on the BSE at 10:05 am in a flat Mumbai market on Monday.
Like this report? Sign up for our daily newsletter to get our top reports.