Mumbai: India’s largest agro chemical company United Phosphorous Ltd.(UPL) has purchased Isagro’s 50% stake in Sipcam Isagro Brazil S/A(SIB), for an undisclosed sum, United Phosphorous informed the Bombay Stock Exchange on Tuesday.
Sipcam Isagro Brazil S/A(SIB) is a 50:50 joint venture between Sipcam – Oxon group and Isagro which makes and distributes agrochemicals.
“Given the high entry barriers, this Brazilian market enjoys coupled with UPL’s limited presence, SIB represents a unique opportunity to kick start operations on a larger scale,” the company said.
Yes Bank was the investment banker to UPL. UPL will use money from internal accruals to purchase the stake.
“Earlier, we had a sub-scale exposure through our subsidiary, but this JV will help with the distribution in addition to providing us the opportunity to cross-sell products,” a company official said. He did not want to be named, as he is not authorised to speak to the media. UPL will market products which are relevant to crops including soyabean, maize and sugar.
The turnover of the joint venture for calendar year 2009 was €80 million, informed the official.
This will be the third acquisition for UPL in this financial year following the acquisition of Mancozeb and the brand Manzatew from DuPont in June 2010 and US-based RiceCo LLC in December. UPL, which declared a net profit of Rs47.32 crore for the quarter ending 31 December 2010 over a revenue of Rs775.54 crore, had a cash balance of around Rs2000 crore.