Swiss speciality chemicals maker Clariant AG is in advanced talks to acquire Mumbai-based chemical manufacturer Galaxy Surfactants Ltd, two people aware of the development said.
The deal is potentially worth Rs1,300-1,500 crore, the two said on condition of anonymity. Galaxy had hired Mumbai-based investment bank Avendus Capital to find a buyer, one of the two people said.
Galaxy supplies a wide range of speciality chemicals including surfactants (compounds that go into detergents, wetting and foaming agents, and emulsifiers), preservatives and coating additives. Its customers include personal care and home care products makers such as Colgate-Palmolive Co., Unilever Plc., and Reckitt Benckiser Group Plc .
Established in 1980 as Galaxy Chemicals, it has presence in Latin America, Europe, North America, Africa and the Middle East.
Mails and text messages sent on Tuesday to Unnathan Shekhar, managing director and chief executive officer of Galaxy Surfactants, did not elicit any response. A Clariant spokesperson declined to comment. An email sent to an Avendus spokesperson did not elicit a response.
As per data from the company’s filings with the Registrar of Companies (RoC), Galaxy Surfactants’ consolidated revenue declined to Rs1,807.43 crore in the financial year 2015-16, from Rs1,875.33 crore in the previous year. Consolidated profit rose to Rs101.13 crore in 2015-16 from Rs67.99 crore in the previous year.
In 2011, Galaxy Surfactants withdrew an initial public offering (IPO) a day before its close due to poor response from high net-worth individuals and retail investors. The overall offer was subscribed just 0.30 times, the Press Trust of India reported at the time.
Clariant has been aggressively pursuing acquisitions to expand its footprint globally. In September 2015, Clariant Chemicals (India) Ltd, a 100% subsidiary of the company, acquired a part of the personal care portfolio of Hyderabad-based Vivimed Labs Ltd for an undisclosed sum. Earlier that year, it bought the black pigment preparations portfolio of Lanxess India, the local arm of German speciality chemicals company Lanxess AG.
In September last year, Clariant made two acquisitions in the oilfield production chemicals business in North America. It acquired Kel-Tech Inc. and X-Chem LLC to accelerate growth of oilfield production chemicals.
India has seen a limited number of big-ticket transactions in chemical industries. In April last year, Fairfax India Holdings Corp. invested $300 million (Rs2,000 crore ) to acquire a 30% stake in Sanmar Chemicals Group.
“The interest from European chemical manufacturers in India is high in the last couple of years. India, more a technology and IP (intellectual property)-driven market, is one of the best outsourcing destinations for the European firms, especially in niche speciality chemical manufacturing space,” said Gopal Agrawal, a partner at investment bank Singhi Advisors Pvt. Ltd.
“Hence, acquisition is considered to be a good choice to get access to manufacturing facilities in India.”