Pidilite Industries rose 1.5% to Rs 1,541.05 after the company signed a definitive agreement with Huntsman Group (USA) for acquiring a 100% stake in one of its subsidiaries in India, Huntsman Advanced Materials Solutions (HAMSPL), for Rs 2,100 crore.
HAMSPL manufactures and sells adhesives, sealants and other products under brands such as Araldite, Araldite Karpenter and Araseal in India.In 2019, business revenue for HAMPSL was approximately Rs 400 crore. In addition to the Indian sub-continent business, the acquisition includes a trademark licence for Middle East, Africa and ASEAN countries.
Under the terms of the agreement, Huntsman will receive approximately 90% of the cash consideration at closing and balance approximately 10% under an earnout within 18 months if the business achieves sales revenue in-line with 2019. The transaction is expected to close by next week.
Bharat Puri, Managing Director, Pidilite Industries, said: With this acquisition, Araldite will add to the already very strong portfolio of Pidilite's adhesive and sealant brands and will complement our retail portfolio. We are confident that this acquisition will create significant shareholder value through strong revenue and cost synergies. We look forward to warmly welcoming the HAMSPL team and the trade and business partners to the Pidilite family.
Pidilite Industries reported 90.86% drop in consolidated net profit to Rs 26.78 crore on 56.32% fall in total income to Rs 898.31 crore in Q1 June 2020 over Q1 June 2019. The company is will announce its second quarter result for FY21 on 4 November 2020.
Pidilite Industries is a leading manufacturer of adhesives and sealants, construction chemicals, craftsmen products, DIY (Do-It-Yourself) products and polymer emulsions in India.
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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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