In a stock exchange disclosure, Sudarshan Chemical stated that it entered into a definitive agreement on October 11, where its wholly-owned Netherlands subsidiary, Sudarshan Europe BV, will acquire Heubach Group’s global pigment business for a total consideration of Rs 1,180 crore (Euro 127.5 million).
Heubach Colorants, the Indian-listed subsidiary of Heubach Group, closed at Rs 670.10, up 1.15% on Friday. Due to the change in management resulting from Sudarshan Chemical’s acquisition of Heubach Group, Sudarshan Chemical will be required to make an open offer to acquire a 26% stake in Heubach Colorants, as per regulatory norms.
Heubach is a major player in the specialty chemicals industry, producing organic and inorganic pigments, dyes, dispersions, and anti-corrosion pigments. The 200-year-old Heubach Group became the second-largest pigment company globally after acquiring Clariant’s BU Pigments in 2022. Heubach generated over a billion euros in revenue in FY21 and FY22 and has a strong presence in Europe, the Americas, and the Asia-Pacific region.
“Both companies will be integrated immediately after the deal’s closure, and we expect the combined entity to generate Rs 800 crore in EBITDA within three years, up from the current Rs 300 crore,” Rajesh Rathi, MD of Sudarshan Chemical, told ET.
“Post-acquisition, the combined company will offer a broad pigment portfolio and strengthen its presence in major markets like Europe and the Americas. This move will enhance SCIL’s product offerings and provide access to a diversified asset base across 19 global sites,” he added.Shares of Sudarshan Chemical have surged 152% over the last year, compared to a 27% gain in the Nifty index.The acquisition includes assets and business operations of Heubach Colorants Germany GmbH, Heubach GmbH, Dr. Hans Heubach GmbH, Heubach Group GmbH and participations held by Heubach Holding Switzerland AG, in downstream group companies in various countries from insolvency administrator in the aforesaid countries. Also it includes 100% shareholding of Heubach Holdings, a Luxembourg based Heubach Group company having investments in shareholding in companies based in India and USA.
Following the acquisition, SCIL aims to become the preferred supplier for its customers by offering a wide range of products across various segments and applications. The company’s R&D and innovation capabilities, combined with its global supply chain network, will enable it to serve customers more effectively, the company said in a stock exchange disclosure.