Japan’s Sumitomo Chemicals is in advanced stage of talks to buy promoters’ stake in Excel Crop Care, a Mumbai-based agro-chemical manufacturer.
According to two sources familiar with the developments, Sumitomo through its Indian subsidiary Sumitomo Chemical India is looking to acquire the promoters’ stake in the company which currently stands at 24.72%.
Sources added that the deal could value the BSE and NSE listed company at around R1,500 crore, which is at 15% premium to its current market cap of R1,271 crore.
Sources added that while the stake sale is unlikely to trigger a mandatory open offer since the percentage of shares changing hands is less than the 26% threshold of the take-over code but earlier reports had indicated that two other stakeholders, Ratnabali Capital Markets and Ratnabali Investments which jointly hold around 19% stake in Excel Crop Care are also mulling an exit but these claims could not be independently verified.
Excel Crop care has appointed Standard Chartered bank as advisor for the transaction. The company’s annual revenues and net profits for FY 14-15 stood at R1,009 crore and R64 crore respectively. E-mail queries sent to both Excel Crop Care and Sumitomo Chemicals remained unanswered till the time of going to the press.
Excel Crop Care was started in 1941 by brothers CC Shroff, Govindji Shroff and Kantisen Shroff as a manufacturer of insecticides and has manufacturing facilities in Gajod, Bhavnagar and Silvassa.
The company has subsidiaries in Tanzania, Australia, Belgium and Brazil and owns 20 patents according to its corporate website.
The company is currently managed by Ashwin and Deepesh Shroff, chairman and managing director respectively. Apart from the Excel Crop Care, the Shroff family also controls Excel Industries, which is into manufacturing of specialty polymer additives and veterinary APIs. Tokyo Stock exchange listed Sumitomo Chemicals is one of the largest agro-chemical players in the world and is part of the Japanese conglomerate Sumitomo group.
In India, the company operates through its wholly-owned subsidiary Sumitomo Chemicals India Limited and has its business spread into several verticals which includes crop sciences among others.
In 2010, Sumitomo Chemical acquired Indian agro-chemical manufacturer New Chemi Industries for an undisclosed sum to boost product offering in household insecticides and agricultural chemicals.
