29-Nov-2023
2 mins read
Acquisition Approval and Share Price Rise
During a meeting on November 28, PCBL’s board sanctioned the acquisition of 212,172 shares of Aquapharm Chemicals Private Limited for a total consideration of Rs 3,800 crore.
PCBL, a carbon black manufacturer, witnessed a significant uptick of 3% in its share price on November 29 after the board’s nod for acquiring a complete stake in Aquapharm Chemicals.
Share Purchase Agreement
A comprehensive share purchase agreement (SPA) has been executed between PCBL and the major shareholders of Aquapharm Chemicals, including Vimal V Mangwani, Dharmesh Mangwani, and Nitin Raojibhai Desai. The agreement is contingent upon acquiring requisite approvals and adhering to specified terms and conditions.
Transaction Financing
PCBL outlined its plan to finance this transaction using a combination of internal funds and external fundraising efforts. This strategy involves leveraging resources from the company, its affiliates, or associates. The deal is subject to clearance from the Competition Commission of India and other customary regulatory filings and approvals.
Entry into Non-Carbon Black Space
The acquisition of Aquapharm Chemicals, valued at Rs 3,800 crore in an all-cash deal, marks PCBL’s strategic foray into the non-carbon black sector. The transaction, slated to conclude by Q4 FY24, will initially rely on debt-based financing.
Strategic Impact
This move by PCBL holds strategic significance as it not only diversifies its portfolio but also reduces its dependency on the tyre industry. The consequent reduction in associated market volatility is viewed as a positive development.
In short, PCBL’s acquisition of Aquapharm Chemicals signifies a pivotal step in its growth trajectory, emphasizing diversification and strategic expansion into new sectors. The company’s planned financing mix and the positive impact on market stability position this acquisition as a significant milestone in its evolution.