Rossari Biotech to acquire Tristar Intermediates; stock ends ~8% higher

Rossari plans to fund the investment through cash on the balance sheet and doesn’t intend to raise any debt for this acquisition.

Jul 19, 2021 04:07 IST India Infoline News Service

Bull market presents uptrend stock market
Rossari Biotech Limited announced that its Board of Directors has approved the acquisition of  Tristar Intermediates Pvt. Ltd. (Tristar Intermediates, company).

As per the agreement and  subject to customary closing conditions, Rossari will be acquiring 100% of the equity share  capital of Tristar Intermediates. 76% of the equity share capital will be acquired upon closure  of the transaction, and the balance 24% over the next 3 years.

The total enterprise value of  the transaction is Rs120cr. Rossari plans to fund the investment through cash on  balance sheet and doesn’t intend to raise any debt for this acquisition. 

The transaction brings together two high-potential companies within the speciality chemical  space. The blend of capabilities will add scale, provide cross-selling opportunities, and  accelerate growth for Rossari, while significantly enhancing value creation in the longer term.  The synergistic acquisition provides Rossari with enhanced portfolio of products, stronger  presence in new & untapped international markets and access to newer technologies. 

Through the transaction, the Company also welcomes on-board Tristar Intermediate’s four  experienced promoters with proven entrepreneurial expertise across technical & marketing  functions, who will continue driving this business for atleast next three years.

Rossari and Tristar Intermediate’s complementary cultures and business models will together strengthen  and consolidate Rossari’s market position as a preferred solutions provider in the Speciality  Chemicals space in India.

The stock ended at Rs1,257.90 up by Rs89.55 or 7.66% from its previous closing of Rs1,168.35 on the BSE. The scrip opened at Rs1,178.80 and has touched a high and low of Rs1,268.50 and Rs1,178.80 respectively. 

Commenting on the business update, in a joint statement, Mr. Edward Menezes, Promoter & Executive Chairman, and Mr. Sunil Chari, Promoter & Managing Director,  said, “We are pleased to announce the acquisition of Tristar Intermediates, which is a strategic  and important milestone for us. The combined capabilities will provide a strong growth  momentum and will enable us to expand further into the high-potential product categories of  personal care and home care, among others. The addition of new international markets,  cross-selling opportunities, talent, and technology know-how will also drive business  efficiencies. 

The acquisition meets all operational & financial criteria laid down by our Board. The  complementary heritage of Rossari and Tristar Intermediates will allow for a smooth  integration to the benefit of our stakeholders, customers and employees, in the coming  months.”  

Related Story

Open Free Demat Account (Rs699)