Coromandel International acquires ‘Sabero Organics’

 

Hyderabad, May 31, 2011: Coromandel International Limited, India’s leading manufacturer of a wide range of fertilizers, Crop protection products and Specialty Nutrient products, has signed definitive share purchase agreement to acquire promoters stake in ‘Sabero Organics Gujarat Limited’, an established agrochemical manufacturer headquartered in Mumbai, India.

Sabero Organics is a leading producer and supplier of a variety of fungicides, herbicides, insecticides and specialty chemicals and is a significant player in Mancozeb fungicide in global markets. The Company has manufacturing operations in Gujarat and markets its products in India and abroad. Current Turnover of the Company is Rs. 413 Crores in FY 11, out of which the exports contribute about Rs. 220 Crores. Sabero Organics has 4 subsidiaries in Brazil, Argentina, Australia and Europe and boasts about 240 registrations for its key products.

Total cost of the acquisition including the public offer is expected to cost Coromandel about Rs. 400-450 Crores based on the response to the proposed open offer pursuant to SEBI regulation. The transaction will be funded through internal accruals.

Sabero has manufacturing facilities in Sarigam Industrial estate near Vapi, Gujarat and manufactures about 25000 MT Technicals and Formulations which represent about 30% of permissions available with the Company. Sabero Organics is currently implementing a SEZ project in Dahej, Gujarat for manufacture of Synthetic Pyrethroids which have very good export potential.

Coromandel International has an existing plant protection business with manufacturing locations in Anlkleshwar, Jammu and Ranipet. The latest acquisition will take Coromandel’s position amongst top 5 plant protection companies in India. As a combined business it will have a large range of over 16 Technical grade pesticides.

Enam Securities Private Ltd acted as financial adviser and AZB & Partner acted as legal advisors to the transaction.

Announcing the acquisition, Mr. .A Vellayan, Executive Chairman, Murugappa Group stated that the acquisition is a part of the strategic plan of the Company to grow its non-subsidy businesses including the profitable pesticides business in Indian and export markets. He further said: “This strategy is to de- risk Company’s business by building a portfolio of subsidy and non subsidy businesses.”

Commenting on the synergistic fit of this acquisition, Mr.Kapil Mehan, Managing Director, Coromandel International Limited stated that the product profile of both the companies complements each other and the combined entity will have unmatched range 16 technical grade pesticides catering to diverse needs of Indian and international customers. He further emphasized that the expanded product offering will meet total crop protection needs of our farmer customers.

About the Sabero Organics

Sabero Organics Gujarat Limited was established in the year 1991 to manufacture specialty and Crop protection chemicals. It is an ISO 9001 and ISO 14001 certified company, listed on the Bombay Stock Exchange and National Stock Exchange in India. It is among the lowest cost producers in the world for its key products and its chemical complex in Gujarat has been recognized as a pioneer industry by the government of Gujarat.

Sabero Organics has extensive manufacturing facilities with state-of-the-art sophisticated equipment and PLC based process control. The company has offices and subsidiaries in Europe, Brazil, Argentina, Philippines and Australia. It is also a recognized export house with over 60% of its revenues from international sales. To know more about the Company, please visit www.sabero.com

About the Coromandel International Limited

Coromandel International Limited, India’s second largest phosphatic fertilizer player, is in the business segments of Fertilizers, Specialty Nutrients, Crop Protection and Retail. The Company manufactures a wide range of fertilizers and markets around 2.9 million tons making it a leader in its addressable markets.

In its endeavor to be a complete plant nutrition solutions Company, Coromandel has also introduced a range of Specialty Nutrient products including Organic Fertilizers. The Crop Protection business produces insecticides, fungicides and herbicides and markets these products in India and across the globe. Coromandel is the second largest manufacturer of Malathion and only the second manufacturer of Phenthoate. Coromandel has also ventured into the retail business setting up more than 425 rural retail centers in the agriculture and lifestyle segments.

The Company clocked a turnover of Rs. 7,527 Cr during FY 2010-11. lt was ranked among the top 20 best companies to work for by Business Today and was also voted as one of the ten greenest companies in India by TERI, reflecting its commitment to the environment and society. Coromandel is a part of the Rs.13, 617 Cr Murugappa Group. For more details, please visit www.coromandel.biz.

About the Murugappa Group

Founded in 1900, the Rs. 17051 Crores (USD 3.8 billion) Murugappa Group is one of India’s leading business conglomerates. The Group has 29 businesses including eight listed Companies actively traded in NSE & BSE. Headquartered in Chennai, the major Companies of the Group include Carborundum Universal Ltd., Cholamandalam Investment and Finance Company Ltd., Cholamandalam MS General Insurance Company Ltd., Coromandel International Ltd., Coromandel Engineering Company Ltd., E.I.D. Parry (India) Ltd., Parry Agro Industries Ltd., Tube Investments of India Ltd., and Wendt (India) Ltd.

Market leaders in served segments including Abrasives, Auto Components, Cycles, Sugar, Farm Inputs, Fertilizers, Plantations, Construction, Bio-products and Nutraceuticals, the Group has forged strong joint venture alliances with leading international companies like Groupe Chimique Tunisien, Foskor, Cargill, Mitsui Sumitomo and Morgan Crucible. The Group has a wide geographical presence spanning 13 states in India and 5 continents.

Renowned brands like BSA, Hercules, Ballmaster, Ajax, Parry’s, Gromor and Paramfos are from the Murugappa stable. The organization fosters an environment of professionalism and has a workforce of over 32,000 employees.

For Media queries, please contact

Sreenivasa Rao Behara
Head – PR, Coromandel International Limited
Tel : 040 – 66997476, 27842034/27847212
Mobile : 9963550040
Email: sreenivasaraob@coromandel.murugappa.com