Sudarshan Chemical Industries (506655) M&A announcement summary

Deal rationale and strategic fit

• Acquisition expands global manufacturing footprint to 19 sites in 11 countries, supporting ambitions to be among the top three pigment players worldwide.

• Access to advanced pigment technology, a broad product portfolio, and major geographies and industry segments.

• Opportunity to integrate a strong customer base and experienced management from the acquired business.

• Addresses Heubach's recent financial challenges with a clear turnaround plan.

Financial terms and conditions

• Purchase price set at Rs 1,180 Cr / EUR 127.5 Mn on a debt-free basis.

• Additional cash infusion of Rs 925 Cr / EUR 100 Mn for working capital, restructuring, and regulatory requirements.

• Acquisition funded through a mix of debt and equity.

• Deal expected to close in Q1 CY2025 or within 3-4 months, subject to regulatory and shareholder approvals.

Synergies and expected cost savings

• Integration aims to create significant synergies in SG&A, manufacturing, procurement, and R&D.

• Restructuring operations at underperforming sites and shifting select production.

• Optimization of SG&A, including potential use of Global Business Services for non-critical roles.

• IT integration and procurement optimization targeted for cost savings.

• Combines R&D, innovation, and global supply chain networks for efficient customer service.