Crystal Crop Protection, backed by South Asia-focused private equity fund Everstone Capital, has agreed to acquire the specialty chemical manufacturing business of the world’s largest chemicals firm, SolvayBSE 0.24 % SA, in India as part of the Belgium-based conglomerate’s strategic decision to discontinue some of the businesses globally.
The deal, which is expected to be announced as early as this week, will mark Solvay’s second business sale in India in less than 12 months. Earlier in March last year, Solvay had sold its 25% stake in National Peroxide to the Wadia Group.
The transaction includes sale of the entire manufacturing facility, which is located on around 10 acres in MIDC Butibori, Nagpur. Crystal Crop and Solvay IndiaBSE 0.24 % have signed a definitive agreement to this effect and an official announcement is expected anytime this week, sources said.
Both Crystal Group and Solvay declined to comment. Mumbai-based Singhi Advisors was the sole advisor to the transaction. Cytec India has become part of Solvay after the Belgium firm’s $5.5 billion takeover of Cytec’s global assets in 2015. “Post the M&A integration, Solvay decided to discontinue some of the Cytec businesses and the Nagpur facility is one among them,” said one of the sources mentioned above.
Crystal, which is primarily an agro-chemicals company, has diversified into seeds and agri-equipment businesses. With the vision to serve the farming community, Crystal is focused on research and development in this space.
Crystal has its own research and development centre, focusing on molecule synthesis, formulations research, process development and bio-efficacy testing and has four manufacturing units — two in Haryana and one each in Jammu and Hyderabad besides a green field project under construction at Dahej, Gujarat.
Founded by first generation entrepreneur NK Aggarwal, the agrochemical company is now run actively by his son Ankur Aggarwal. The company has a top line of about Rs 1,200 crore with an EBITDA margin of 12-13%.
“Crystal does not have a large scale manufacturing facility. With this transaction, Crystal will have back-end integration of R&D as well as the manufacturing facilities,” said one of the sources mentioned above. Founded in 1863 by Ernest Solvay and his brother Alfred Solvay to produce sodium carbonate by the solvay process, the Brussels-headquartered company is one of the world’s largest chemicals firms. The company has a revenue of 11.4 billion euro and a net profit of $674 million as on CY2016.
“Every M&A activity will also result in acquisition of some non-core businesses as well. So, such asset sales are part of the post-M&A integration processes. The best part is such assets are being used for another similar company for its expansion plans,” said Sumit Agarwal, founding partner at Suvan Law Advisors, a Mumbai-based law firm.
