France’s Rhodia set to acquire PI Polymer
22 Dec 2010
French speciality chemicals company Rhodia SA is set to acquire PI Polymer, the engineering plastics division of Bangalore's PI Industries Ltd, which is exiting its polymers business to focus on its core agricultural inputs and fine chemicals divisions.
The companies did not say how much the deal is worth, but Rhodia said the acquisition price represents a seven-time multiple of the estimated earnings before interest, taxes, depreciation and amortisation (EBITDA) for PI's polymer business in 2010-11.
Rhodia, which caters for the automotive, electronics, flavours and fragrances, health, personal and home care, consumer goods and industrial segments, will strengthen its presence in India, with this deal.
PI Polymer has revenues of about $13 million and operates at an EBITDA margin of close to 15 per cent. According to experts, the acquisition price represents an estimated EBITDA multiple of around 9 times, pegging the deal size at around $17.5 million.
Mumbai-based boutique M&A advisory firm Singhi Advisors acted as the sole advisors to the transaction.
The transaction includes all the assets of PI Polymer, primarily one industrial facility that employs more than 80 people, R&D capabilities, customer base and logistics network in India. Subject to various customary closing conditions, the completion of the transaction is expected to be finalised by the end of March 2011.
