Pidilite acquires consumer & bazaar business of Araldite for Rs 2,100 Cr
Pidilite Industries is acquiring complete interest in US-based Huntsman Group’s Indian subsidiary Huntsman Advanced Materials Solutions Private Limited (HAMSPL) for a consideration of about Rs 2,100 crore to consolidate its leadership position in the domestic adhesive market.
The board of Pidilite Industries approved a definitive agreement with Huntsman Group for acquiring 100 per cent stake in one of their subsidiaries in India at its meeting on October 28.
This deal is for a cash consideration of about Rs 2,100 crore, excluding working capital and other adjustments, subject to certain preconditions being met prior to the closing of the transaction, a company statement on the transaction said.
The target company HAMSPL manufactures and sells Adhesives, Sealants and other products under well-known brands such as Araldite, Araldite Karpenter and Araseal in India. In calendar year in 2019, the company’s business revenue was approximately Rs 400 crore.
The acquisition pitch by Pidilite includes HAMSPL’s Indian Sub-Continent business as well as includes a Trademark licence for Middle East, Africa and ASEAN countries.
Huntsman Group is a leading global producer of differentiated organic chemical products. Under the terms of the agreement, Huntsman will receive approximately 90 per cent of the cash consideration at closing and balance approximately 10 per cent 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 in Retail Trade.
Commenting on the acquisition, Apurva Parekh, Executive Director, Pidilite Industries Limited, said: “Araldite is an iconic brand and a market leader in Epoxy Adhesives in India. We are thankful for all the support extended by the Huntsman group and we are confident that our association will remain strong going forward as well.”
Bharat Puri, Managing Director, Pidilite Industries Limited, further commented: “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.”