Coromandel Makes Open Offer To NACL Shareholders After Move To Buy Controlling Stake
Indian agri-solutions provider agrees to buy a 53% stake in NACL from its promoter KLR Products for 820 crore rupees ($94 million)
(The Corner Office Journal) -- Coromandel International Ltd. made a mandatory open offer to NACL Industries Ltd.’s public shareholders to acquire an additional 26% stake in the crop protection player after agreeing to acquire a controlling stake in the company.
Coromandel is looking to acquire up to 5.25 crore shares, or a 26% stake, in NACL from its public shareholders at 76.70 rupees apiece in cash, according to a stock exchange announcement.
The development came after the Indian agri-solutions provider agreed to buy a 53% stake in NACL from its current promoter KLR Products Ltd. for 820 crore rupees ($94 million), or at 76.70 rupees per share.
The proposed transaction, which is subject to the regulatory approvals, will likely be completed over next few months.
The Rationale
Coromandel said the proposed acquisition will position the company as one of the leading players in the Indian crop protection industry with a wide range of technicals and pan-India presence in the domestic formulation business.
“By combining our extensive distribution network and deep industry expertise with NACL’s manufacturing capabilities, diversified product portfolio and large formulations presence, we are setting the stage for a significant increase in operational scale,” Coromandel Executive Chairman Arun Alagappan said.
NACL operates technical and formulation plants in Andhra Pradesh apart from a centralized research and development facility near Hyderabad. NACL’s subsidiary also recently invested in technical grade facility at Dahej, capable of manufacturing active ingredients.
Coromandel said the acquisition will also help in expanding the company’s scale, accelerating its entry into contract manufacturing business, fast-tracking new product commercialization and expanding its product portfolio.
Advisors
JM Financial Ltd., which acted as financial advisor to Coromandel for the transaction, is also the manager to open offer.
AZB & Partners acted as the company’s legal counsel. E&Y acted as financial diligence and tax diligence advisor, while SSPA & Co. Chartered Accountants acted as independent valuers.
Note: $1 = 87.2326 Indian rupees
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