Private equity firm Bain Capital has acquired Hyderabad-based Porus Labs, a specialty chemicals company, for an undisclosed amount.
Mint first reported the acquisition last month, citing individuals aware of the development. The estimated deal value was between Rs 2,500-3,000 crore ($302-363 million).
The completion of the transaction is contingent upon obtaining necessary approvals from relevant authorities.
Rishi Mandawat, a partner at Bain Capital Private Equity, stated that the firm intends to establish a platform in the specialty chemicals contract development and manufacturing sector, leveraging Porus Labs' position.
Mandawat further added, "We believe in the industry's growth prospects and recognise potential to expand the company's market presence by developing or acquiring chemical capabilities in key sectors."
Porus Labs, founded by N Purushothama Rao in Hyderabad in 1994, operates in various segments such as specialty polymers, electronic chemicals and agrochemicals.
In FY22, Porus reported net sales of Rs 806.7 crore, showing an 18.9% increase from Rs 678.4 crore in FY21. The earnings before interest, taxes, depreciation, and amortization (Ebitda) during this period rose 97% to Rs 241.6 crore from Rs 122.9 crore y-o-y.
Bain is not new to the global specialty chemical sector. It has invested in specialty chemical producers like Lonza AG and Italmach Chemicals.
The chemical industry has been attracting heightened investor attention in recent years.
As previously reported by Mint on 30 May, several private equity firms were evaluating potential investments in Porus.
There has been an increasing investor interest in the chemicals sector in recent years.
In February 2022, CVC Capital acquired Sajjan India for over Rs 7,000 crore. This acquisition also attracted investment from the Canada Pension Plan Investment Board.
Advent International has been actively establishing a platform for pharmaceuticals and specialty chemicals through Cohance Lifesciences. As part of this initiative, Advent acquired three companies: RA Chem, ZCL Chemicals, and Avra Labs.
Furthermore, in January, US-based water technology provider Xylem Inc. agreed to acquire Evoqua Water Technologies Corp in a $7.5 billion deal. Evoqua provides water treatment services, including chemicals.
According to a report published by global consulting firm KPMG in November 2022, the specialty chemicals sector in India holds significant importance in driving the country's economy. It currently contributes around 7% to the GDP and is projected to reach $304 billion by 2025, a substantial increase from $178 billion in 2021.
