Sudarshan Chemical Industries Ltd said Friday it has agreed to acquire German pigment manufacturer Heubach Group for €127.5 million (Rs 1,180 crore or about $139 million) in an asset and share deal.
The acquisition will increase Sudarshan Chemical’s exposure to Europe and the Americas, and enhance its product portfolio, the company said in a statement.
The merged entity will have 19 sites globally and will be led by Rajesh Rathi, managing director at Sudarshan Chemical.
The company said the acquisition will create a global pigment manufacturer, adding Heubach's technological capabilities to its own operations.
Heubach is a key player within the specialty chemicals industry, which consists of organic pigments, inorganic pigments, dyes, dispersions and anti-corrosion pigments. It became the second-largest pigment player in the world, with presence across Europe, Americas, and the APAC region, following its acquisition of Clariant’s pigments business in 2022. It reported €1.07 billion in revenue for FY21 and €1.14 billion for FY22. In 2023, its revenue was €878.8 million.
The acquisition will help the German outfit address financial challenges such as rising costs, inventory issues, and high interest rates, the Indian company said.
“We will carefully integrate these two companies to create a global pigments company, with Frankfurt remaining a strategically important location,” said Rathi.
Sudarshan Chemical recorded revenue of Rs 2,141 crore and a net profit of Rs 335 crore for 2023-24. Its shares gained 20% on Friday after the acquisition announcement. In the past three months, the shares have gained over 33%.
Incorporated in 1952, Sudarshan Chemical has exposure to more than 85 countries. It produces performance colorants, and a range of organic, inorganic and pearlescent pigments and dispersions. It also offers classical azo pigments, high performance pigments, effect pigments and pigment dispersions. The company has manufacturing facilities in Roha and Mahad in Maharashtra.
The acquisition is expected to close in 3-4 months, subject to the satisfaction of customary closing conditions, including approvals from regulators and Sudarshan shareholders.
Crawford Bayley and Noerr were the legal counsels to Sudarshan and DC Advisory was the financial advisor.