Pidilite Industries Ltd has entered into a definitive agreement with Huntsman Group (USA) to acquire 100% stake in one of its subsidiaries in India, Huntsman Advanced Materials Solutions Private Ltd (HAMSPL). The company’s board on Wednesday approved this.
This is for a cash consideration of approximately ₹2,100 crore, excluding customary working capital and other adjustments, subject to certain preconditions being met prior to the closing of the transaction.
HAMSPL manufactures and sells adhesives, sealants and other products under well-known brands such as Araldite, Araldite Karpenter and Araseal in India.
In 2019, the company clocked business revenue of ₹400 crore.
In addition to the Indian sub-continent business, the acquisition includes a trademark licence for Middle East, Africa and ASEAN countries, Pidilite said in a statement.
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.
HAMSPL has a nation-wide distribution network and a strong presence across India.
Apurva Parekh, ED, Pidilite Industries said, “Araldite is an iconic brand and a market leader in Epoxy Adhesives in India. Our association [with Huntsman] will remain strong going forward as well.”
Bharat Puri, MD, 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.”
