French firm Rhodia SA will acquire PI Polymer, the engineering plastics business of PI Industries Limited.

This transaction supports the French company’s aim to increase its market share in the Indian polyamide compound market to more than 15% by 2015.

This strategic sale is part of the restructuring exercise for PI Industries, which will now focus on its core activities of agrochem and fine chemicals.

The deal includes all the assets used and held by 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 conditions, the transactions is expected to complete by the end of March 2011.

PI Polymer has revenue of about $13 million and operates at an EBITDA margin of close to 15%. The acquisition price represents an estimated EBITDA multiple of around 9x. This works out to a deal size of around $17.55 Mn.

Singhi Advisors were the sole advisors to the transaction.

Transaction Reference: Press Release

Udaipur-based PI Industries is into agri inputs, fine chemicals, CRAMS, polymers and engineering plastic compounds.

PI had diversified into polymer compounding business in 1994 and since then has been closely working with OEMs in automotive, electricals and home appliances industry segments to develop bespoke engineering plastics compounds.

This year in July, PI Industries received $31 Mn custom synthesis contract.

PI industries reported a sales turnover of Rs.186.98 Cr with net profit of Rs.18.75 Cr for the quarter ended September 2010. For quarter ending September 2009, its sales was Rs.155.52 Cr with net profit of Rs.12.84 Cr.

Euronext (Paris) listed Rhodia is a chemical firm and has operations in India since 2001 through its surfactants business, serving the home & personal care and coatings markets.

Rhodia, caters to automotive, electronics, flavors & fragrances, health, personal & home care, consumer goods & industrial segments and employs 13,600 people worldwide and generated sales of $5.3 Bn in 2009.

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KVEZAR VIEW

  DEAL TRACKER FOR

Date	Transaction	Type	Buyer	Size ($mn)
21/12/10	PI Industries - PI Polymer - Rhodia	M&A	Rhodia SA	-

 

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  Profiles

Company
Name	Promoters	Office	Competitor	Website
PI Industries Limited	Salil Singhal	UdaiSagar Road Udaipur Rajasthan 313001	Aero Agro Chemical Industries Limited Bayer CropScience Limited United Phosphorus Limited Nagarjuna Agrichem Limited	http://www.piindustries.com/

  Advisor

Singhi Advisors