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Kiri Dyes completes DyStar acquisition

16
Mar '10
Ahmedabad-based Kiri Dyes and Chemicals Ltd. (KDCL) through its SPV Kiri Holdings Singapore Private Limited has announced the completion of acquisition of Germany Based multinational Dy'Star along with its subsidiaries with support of its joint venture partner Longsheng Group, China.

KDCL the largest manufacturer and exporters of reactive dyes & Intermediates from India has been promoted by Mr. Pravin Kiri Chairman and Mr. Manish Kiri, Managing Director and their family. KDCL achieved Sales of Rs. 238.53 crores with PAT of Rs. 17.78 crores for the 9 months ended on 3'1.12.2009. Kiri Dyes and Chemicals Limited is Listed on BSE and NSE having present market capitalization of Rs. 1065 crores. The Company is highly backward integrated having product range of Dyes, Dyes 1ntermediates and Basic Chemicals.

DyStar is the global market leader for dyes, dyes solutions, leather solutions, performance chemicals, new technologies and custom manufacturing of special dyes/pigments with about 21% market share globally having sales of Euro 800 Mn., In calendar year 2008. It has sales and technical support presence in all key markets; agencies in 50 countries and 18 production facilities in 12 countries. DyStar's global client base includes well known international names such Wal-Mart, Levis, Nike,Addidas etc.DyStar has presence in India through its subsidiary DyStar India Private Limited. All leading textile players namely Raymond, Bombay Reyon,Alok Industries are key customers of DyStar.

On 4th of Feb. 2010 KDCL acquired DyStar through its SPV Kiri Holding Singapore Pvt. Ltd. 1t is the historical acquisition by any small sized company from India. KDCL acquired DyStar from Insolvency Proceedings in Germany and has avoided taking over all liabilities including employees and bank liabilities in Germany which is the most crucial part in the Trans border acquisition especially in Europe. KDCL paid Euro 50 Mn to acquire net asset of Euro 291.56 Mn in addition to fully depreciated fixed assets of Euro 140 Mn at replacement value. The Acquisition also includes DyStar's Patents, IP rights, brand names, Trademarks & subsidiaries in 22 countries across the world.

Synergies of both companies, DyStar and KDCL along with participation and support of Longsheng Group, China will provide long-term sustainability to DyStar. The acquisition will help strengthen global leadership of DyStar, and will create high values for all their stakeholders.

KDCL has plans to turnaround DyStar by replacing, high cost German manufacturing base with low cost manufacturing in India and China. It is targeted that DyStar will be cash surplus from 2010 and will start generating PAT from 2011. KDCL and its associate Lonsen Kiri Chemical Industries Limited will benefit by transferring production of reactive dyes, acid dyes and direct dyes from Germany' to India.

KDCL has set a sales target of about Rs. 572 crore (Euro 91 Mn.) with expected PAT of approx. Rs. 61 crore (Euro 9.75 Mn.) in 2011-12 on a stand alone basis. DyStar is expected to achieve sales of Euro 675 Mn. with PAT of Euro 34 Mn. in 2012, On a consolidated basis the expected sales is targeted as Euro 766 Mn. with PAT of Euro 43.75 Mn. in 2012.

KDCL was advised by SBI Capital Markets Ltd. and its German counterpart Angermann M&A International GmbH in this acquisition. SBI Capital Markets Ltd., was also the exclusive arranger for the acquisition financing required for the deal. KDCL has secured debt financing from consortium of banks led by' State Bank of India, Export Import Bank of India, Oriental Bank of Commerce and Central Bank of India.

Kiri Dyes and Chemicals Ltd (KDCL)


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