Apcotex Industries soars on acquiring equity capital of Omnova Solutions India

Apcotex Industries is currently trading at Rs 203.00, up by 6.00 points or 3.05% from its previous closing of Rs 197.00 on the BSE.

The scrip opened at Rs. 200.00 and has touched a high and low of Rs. 206.00 and Rs. 196.00 respectively. So far 5119 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 5 has touched a 52 week high of Rs. 360.70 on 28-Jul-2015 and a 52 week low of Rs. 186.10 on 21-Jan-2016.

Last one week high and low of the scrip stood at Rs. 208.00 and Rs. 195.10 respectively. The current market cap of the company is Rs. 414.76 crore.

The promoters holding in the company stood at 57.60% while Institutions and Non-Institutions held 0.06% and 42.34% respectively.

Apcotex Industries (Apcotex) has acquired 100% of the equity capital of Omnova Solutions India (OSIPL) in an all cash deal. This is aligned to Apcotex's long term strategy to tap the full potential of the Emulsion Polymers industry, through organic & inorganic growth. OSIPL is the only Producer of Nitrile Rubber in India and only the second producer of High Styrene Rubber after Apcotex. It has a factory in Valia, Gujarat.

The acquired business will add muscle to Apcotex through additional gross revenue of around Rs 200 crore. The company has reported gross revenue of Rs 391 crore, EBITDA of Rs 47 crore and PAT of about Rs 25 crore for the financial year ended March 31, 2015. The acquired business made a marginal surplus on cash basis for the latest accounting year. Apcotex is confident of improving its performance in the future. This is expected through the synergy that will flow on account of significant commonality of raw materials, cost optimization, similar chemistry, plant set-up, production processes, R&D facilities and human resources. The company will also explore rationalizing of the asset base of the acquired business.

The acquisition gives Apcotex an opportunity to grow in new adjacencies in Emulsion Polymers such as Nitrile Rubber, Nitrile Powder and Nitrile/PVC Blends, which find application in automotive components, rice de-husking rolls, rubber hoses, moulded rubber products, and other industrial products. The enterprise value of this transaction is Rs 36 crore. Additional deployment of around Rs 40 crore is planned in the acquired business in the short to medium term. The acquisition has been funded entirely through internal accruals.