Coromandel International To Acquire Crop Protection Firm NACL Industries

Coromandel International Limited (BSE: 506395, NSE: COROMANDEL), one of India’s leading agri-solutions provider, today announced the signing of definitive agreements to acquire majority stake in NACL Industries Limited (NACL).

NACL is an India based Crop Protection player having strong branded formulation business in domestic markets, exports Technicals in key global geographies and has presence in contract manufacturing operations with global multinational agrochemical companies. Coromandel is set to acquire 53% shareholding in NACL industries, for consideration of Rs 820 Crores at Rs 76.7/- price per share from the current promoter KLR Products Limited. Coromandel also proposes to make an open offer to the public to acquire upto 26% of the equity share capital of the company as per the SEBI Takeover Regulations. The proposed transaction is subject to regulatory approvals and is likely to be consummated over next few months.

The proposed acquisition will position Coromandel as one of the leading players in the Indian Crop Protection industry with a wide range of technicals and pan India presence in domestic formulation business. This will also help in expanding Coromandel’s scale, accelerating its entry into contract manufacturing business, fast-tracking new product commercialization and expanding its product portfolio.

NACL Industries operates Technical and Formulation plants in Andhra Pradesh, besides having centralized R&D facility near Hyderabad. NACL’s subsidiary has also recently invested in Technical grade facility at Dahej, capable of manufacturing Active Ingredients. It has established formidable partnerships with key global players, offering contract manufacturing services for over two decades. The company has strong brand presence in domestic formulations segment with pan India footprint.

Reflecting on the transaction, Coromandel’s Executive Chairman Mr. Arun Alagappan stated, "This is a defining moment for Coromandel International’s Crop Protection business. Coromandel’s long-term strategy has always been centered on driving sustainable growth and market leadership. The decision to acquire NACL Industries is a natural extension of company’s growth vision. By combining our extensive distribution network and deep industry expertise with NACL’s manufacturing capabilities, diversified product portfolio and large formulations presence, we are setting the stage for a significant increase in operational scale. The acquisition not only expands our scale but also enables us to tap into critical customer segments and secure strategic CDMO relationships.”

Coromandel’s Managing Director and Chief Executive Officer, Mr Sankarasubramanian added, "This acquisition will strengthen Coromandel’s presence in Crop protection business both in domestic and export markets. Coromandel will leverage its management expertise, credit access, sourcing capabilities, and diversified presence in international markets to strengthen NACL’s operations in a short period and create value for the shareholders. With the combined synergies in R&D and manufacturing, we can accelerate our Go to market strategy for new products and intermediates, thereby increasing our product offerings in domestic and global markets.”

JM Financial Limited acted as exclusive financial advisor to Coromandel for this transaction and is also Manager to Open Offer. AZB & Partners acted as Company’s Legal Counsel, E&Y acted as financial diligence and tax diligence advisor and SSPA & Co. Chartered Accountants acted as independent valuers.

About Coromandel

Coromandel International Limited is amongst India's pioneers and leading Agri solutions provider, offering diverse products and services across the farming value chain. It operates in two major segments: Nutrient and other allied businesses and Crop Protection. These include Fertiliser, Crop Protection, Bio Products, Specialty Nutrients and Organic businesses. The Company is 2nd largest manufacturer and marketer of Phosphatic fertiliser in India. The Company's Crop Protection products are marketed in India as well as in international geographies, offering wide range of technical and formulation products. The Specialty Nutrients business of the Company focuses on water soluble fertiliser, secondary & micronutrients and nano fertiliser products. The Company is leading marketer of Organic fertiliser in India. The Bio Products business of the company focusses on plant extractions for various applications. It also operates a network of around 750+ rural retail outlets across Andhra Pradesh, Telangana, Karnataka and Tamil Nadu. Through these Retail outlets, the Company offers agri inputs and farming services including crop advisory, soil testing and farm mechanization to around 3 million farmers. The Company has 7 R&D centers and a strong Regulatory setup, supporting the businesses in process development and new product introduction. The Company has 18 manufacturing facilities, spread widely across India, producing wide range of Nutrient and Crop Protection products, which are marketed through an extensive network of dealers and its own retail centers.

The Company clocked a turnover of Rs. 22,290 Crores during FY23-24. Its efforts towards environment have been well recognized by international organizations like UNDP and has also been voted as one of the ten greenest companies in India by TERI. Coromandel is a part of the INR 778 billion (INR 77,881 Crores) of the Murugappa Group.

For more details, visit www.coromandel.biz

About Murugappa Group

A 124-year-old conglomerate with presence across India and the world, the INR 778 billion (77,881 crore) Murugappa Group has diverse businesses in agriculture, engineering, financial services and more.

The Group has 9 listed companies: Carborundum Universal Limited, CG Power & Industrial Solutions Limited, Cholamandalam Financial Holdings Limited, Cholamandalam Investment & Finance Company Limited, Coromandel International Limited, E.I.D. Parry (India) Limited, Shanthi Gears Limited, Tube Investments of India Limited and Wendt India Limited. Other major companies include Cholamandalam MS General Insurance Company Limited and Parry Agro Industries Limited. Brands such as Ajax, Hercules, BSA, Montra, Montra Electric, Mach City, Chola, Chola MS, CG Power, Shanthi Gears, CUMI, Gromor, Paramfos, Parry’s are part of the Group’s illustrious stable.

Abrasives, technical ceramics, electrominerals, electric vehicles, auto components, fans, transformers, signalling equipment for railways, bicycles, fertilisers, sugar, tea and several other products make up the Group’s business interests.

Guided by the five lights — integrity, passion, quality, respect and responsibility — and a culture of professionalism, the Group has a workforce of over 83,500 employees.

For more details, visit www.murugappa.com

Murugappa Group to Acquire Germany's 259 Years-Old Hubergroup for $310 Mn

The Murugappa Group, in partnership with Avenue Capital Group, has agreed to acquire Hubergroup, a 259 years old German company, for an enterprise value of $310 million. This acquisition will help Murugappa expand its presence in the global print and packaging sector.

Founded in 1765, Hubergroup has grown from a small family-owned business to a global leader in the printing inks and chemicals industry, known for its dedication to quality and innovation.

In 2015, Hubergroup celebrated its 250th anniversary, marking its status as one of the world's largest ink manufacturers.

The acquisition deal includes $160 million to refinance Hubergroup's debt and a $150-million equity infusion from Murugappa.

The acquisition is subject to regulatory approvals and is expected to strengthen Hubergroup's market position and support its growth in key international markets.

Hubergroup has been facing significant debt issues. The company planned to take on substantial debt to buy equity in its subsidiaries from its parent company, MHM Holding GmbH. This led to financial challenges, and the company had to extend its repayment deadlines with the help of lenders.

The acquisition by the Murugappa Group includes $160 million to refinance Hubergroup's debt, highlighting the extent of its financial struggles.

The headquarters of Hubergroup is located in Grossenbrode, Germany. This is where the company's main operations and management are based.

Hubergroup is a significant player in the printing inks and chemicals industry. In India, Hubergroup India is the market leader with a 30% market share. The company serves major print media houses, packaging companies, and FMCG clients.

Apart from the this acquisition of Hubergroup, Murugappa Group-owned CG Power has announced plans to raise Rs 3,000 crore through a Qualified Institutional Placement (QIP) to fund acquisitions and capex plans, including its foray into the semiconductor business.

Notably, Murugappa-owned CG Power acquired a 55% stake in GG Tronics India for Rs 319 crore to bolster its railways Business. The company has recently announced a definitive agreement to acquire the radio frequency components business of Renesas Electronics Corporation for $36 million, enabling it to enter the semiconductor design business

Murugappa Group Launching 3 Electric Tractors this Fiscal Year

Representative

TI Clean Mobility (TICMPL), the electric vehicle arm of Murugappa Group’s engineering company Tube Investments of India (TII), is set to launch at least three electric tractors during this fiscal, reported The Business Line.

Notably, in January 2022, TII acquired a 70% stake in Cellestial in a mix of primary and secondary purchases of shares. Later this year in January, TII acquired the remaining 30% stake held by founders of electric tractor manufacturer Cellestial E-Mobility.

The acquisition of Cellestial E-Mobility has enabled TII to design and build e-tractors from a ground-up architecture. Hyderabad based Cellestial E-mobility, the maker of the first electric tractor in India, had unveiled its first E-Tractor in March 2020, with performance metrics that match 4X of the equivalent Diesel-Powered tractor.

TII, which has already launched an electric passenger autorickshaw ‘Montra’ across the south of India, is now betting big on e-tractors citing the cost economics which is the same for both electric three-wheelers and electric tractors.

With over 27 tractor brands, India is the world's largest producer and market for tractors, with 16 domestic and 4 multinational corporations manufacturing tractors.

Tractors in India are majorly powered by diesel engines which are an increasing source of carbon emissions and criteria pollutants.

Electric tractors can play an essential role towards green farming, benefitting both the farmer and the environment.

To recall, in November last year, TII also acquired a 50% stake in X2Fuels & Energy, a startup company engaged in developing processes to convert waste into fuels, for 61.5 million Indian rupees ($752,815).