Berger in talks to acquire Snowcem’s entire paints business
By Mumbai: | 10 Oct 2002
Mumbai: Berger Paints India says it is negotiating with Snowcem to acquire its entire paints business, including all intellectual property rights. The company has executed a non-binding term-sheet with Snowcem that states its intention to acquire the latter's entire paint business, on completion of negotiations and undertaking due diligence.
Other than paints, Snowcem manufactures primers, construction admixtures and surface preparation products. Snowcem products have a strong presence in the domestic market. The company has also entered into Sri Lanka and has plans to foray into Nepal, Bangladesh and Vietnam.
On the other hand, Berger Paints is in the decorative, industrial, automotive and powder coatings segment of the paint industry. The Berger stock opened today at Rs 75.5 on the Bombay Stock Exchange, and Snowcem at Rs 48.5.
If the deal, which is valued in the region of Rs 140 crore, goes through, it would strengthen Berger's position in the exterior paints category where Snowcem at present has 26 per cent share of the cement paint market and about 50 per cent of the textured finish market. The investment bank N M Rothschild is understood to be advising Snowcem on the sale.
During the year ended 31 March 2002, Snowcem India had a total sale of Rs 120 crore. The net profit for the year was at Rs 10.7 crore. During the first quarter of the current financial year, the company clocked a net profit of Rs 1.5 crore on a sale of Rs 29.5 crore. Berger had sales of Rs 602 crore for the year ended 31 March 2002.