French Rhodia SA, a €4billion (US$5.26 billion) specialty chemicals major, will acquire PI Polymer, the engineering plastics business of PI Industries. PI Industries is into agri inputs, fine chemicals, CRAMS, polymers and engineering services. In a statement to BSE, P I Industries said that the transfer includes the transfer of all the assets used and people employed by PI Polymer, research & development capabilities, customer base and logistics network in India. The transaction is expected to complete by the end of March 2011. The divestment is a part of the P I Industries' strategy to concentrate on its agri-inputs and custom synthesis businesses, the company said.
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 US$13 mln 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 US$17.5 mln. 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.
PI Industries 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 for niche and complex applications for automotive, electricals and home appliances industry segments offering an unrivalled product mix of bespoke polymer compounds.