-By ArdorComm News Network
October 14, 2024
Pune-based Sudarshan Chemical Industries Ltd. (SCIL) has entered into a definitive agreement to acquire the global pigment business of Germany’s Heubach Group for Rs 1,180 crore (€127.5 million). This strategic acquisition is expected to significantly enhance SCIL’s product portfolio while expanding its global footprint, particularly in Europe and the Americas. The news of the acquisition boosted SCIL’s shares by 19.1%, pushing the stock price to Rs 1,208 and raising the company’s market valuation to Rs 8,359 crore.
The deal, which involves both asset and share acquisition, will combine SCIL’s existing operations with Heubach’s strong technological expertise and established market presence, creating a powerhouse in the global pigment industry. Once the acquisition is completed, the merged entity will boast a broad pigment portfolio, 19 global sites, and a diversified asset footprint.
In 2022, Heubach became the world’s second-largest pigment manufacturer following its integration with Clariant. However, the group has faced financial challenges over the past two years due to rising costs, inventory issues, and high interest rates. SCIL’s acquisition of Heubach comes with a clear turnaround plan to address these issues, according to an official statement from the company.
Rajesh Rathi, Managing Director of SCIL, will lead the combined entity post-acquisition. The deal will require regulatory approvals from bodies such as the Competition Commission of India and other relevant authorities across different jurisdictions. The acquisition is expected to close within 3-4 months, pending these approvals and shareholder consent.
SCIL has experienced a robust financial year, with its shares more than doubling in value. During FY24, the company reported a net profit of Rs 335 crore on revenues of Rs 2,141 crore. In the three months ending June 2024, SCIL recorded a net profit of Rs 41 crore on revenues of Rs 580 crore. Heubach Group’s consolidated turnover in 2023 was €879 million, down from €1,069 million in the previous year.
With this acquisition, SCIL is poised to strengthen its global presence and leverage Heubach’s expertise to drive further growth and innovation in the pigment sector.
Source: Business Standard