Coromandel to buy out Sabero Organics promoters’ stake for Rs283 cr

Fertilisers major Coromandel International, part of Murugappa Group, plans to buy out the entire stake of promoters in Sabero Organics Gujarat, a maker of insecticides and herbicides. Shares of Sabero Organics were up 10 per cent today closing at Rs 97.9, a new high on the BSE, after Coromandel announced its plans for buying out the promoters at Rs198.47 per share.
 
The Rs7,527-crore Coromandel is acquiring the 42.22 per cent  stake held by promoters at Rs160 per share and in addition is paying a non-compete fee of Rs38.47 per share.

This would work out to around Rs283 crore with the total acquisition cost, including the public offer, expected to cost Coromandel around Rs400 crore to Rs450 crore.

The company would make an announcement to Sabero shareholders for acquisition of up to an additional 31 per cent of the stake.

"The transaction will be funded through internal accruals," the company said in a statement.

The acquisition would see Coromandel emerge as among the top 5 companies offering plant protection products in the country.

According to A Vellayan, executive chairman, Murugappa Group, the acquisition was a part of the strategic plan to grow non-subsidy businesses including the profitable pesticides business in Indian and export markets.