French multinational Rhodia SA, an Euro 4-billion ($5.26 billion) specialty chemicals major, will acquire PI Polymer, the engineering plastics business of PI Industries, which is into agri inputs, fine
chemicals, CRAMS, polymers and engineering services.
This strategic sale is part of the corporate restructuring exercise of Standard Chartered Private Equity-backed PI Industries towards consolidating its position in its core activities of agrochem and fine chemical businesses. Rhodia, which caters to automotive, electronics, flavors & fragrances, health, personal & home care, consumer goods & industrial segments, will get to strengthen its presence in India, with this deal.
PI Polymer has revenue of about $13 million and operates at an EBITDA margin of close to 15%. Sources close to the development told VCCircle that the acquisition price represents an estimated EBITDA multiple of around 9x, pegging the deal size at around $17.5 million.
This transaction supports the French company’s ambition to increase its market share in the Indian polyamide compound market to more than 15% by 2015. Mumbai based boutique M&A advisory firm Singhi Advisors were the sole advisors to the transaction.
The transaction includes all the assets of PI Polymer, primarily one industrial facility that employs more than 80 people, R&D capabilities, customer base and logistics network in India. Subject to
various customary closing conditions, the completion of the transaction is expected to be finalized by the end of March 2011.
PI Industries, founded in 1947, diversified into polymer compounding business in 1994 and since then has been closely working with OEMs in various industry segments to develop customised engineering plastics compounds.
Since then, PI Polymers has grown to a Rs 70- crore revenue business which deals in compounding of polymers for niche and complex applications for automotive, electricals and home appliances industry segments offering an unrivalled product mix of bespoke polymer compounds. The other companies in the group are Secure Meters, involved in Energy Meters and Wolkem Industries, one of the major players in the mining of Lime.