Sherwin buy to be EPS accretive from Q1 2014: Berger

Berger Paints, a leading paint manufacturer acquired full business of Sherwin Williams India Limited under Brushworks Private Limited.

MD & CEO Abhijit Roy told CNBC-TV18 that Berger will fund this acquisition through internal accruals and this acquisition will become EPS accretive from Q1 2014. He added that the company is open to more acquisition going forward.

Below is the edited transcript of his interview to CNBC-TV18.

Q: How much have you paid for the architectural business of Sherwin Williams and when will this acquisition become earnings per share (EPS) accretive on your books?

A: I cannot disclose the price paid right now. This acquisition would become EPS accretive from Q1 2014.

Q: How much holding did your company acquire and do you have a controlling stake in the company now?

A: We will have complete control on the business. We have acquired full business of Sherwin Williams India Limited under our Brushworks Private Limited. Through this transaction we have acquired their all over India business operations.  

Q: When will this start to contribute in your books? How much do you hope to see in terms of incremental revenues, incremental margins etc via this particular acquisition?

A: It will start to contribute from Q1 of 2014. From April 1, it will kick in and there will be some amount of incremental increase in revenue which will happen though not very significant.

Q: Is Sherwin Williams profit making on the EBITDA level as well as the bottomline.  What is the rationale behind this acquisition?

A: I cannot disclose the revenue or profit guidance for this particular business. The rationale for acquiring this company is two fold, first – they have some interesting products and technology which interested us. We also retain the brand rights of Sherwin Williams in India for the next few years.

Second, they have good quality and trained man power. They have significant presence in the western part of the country and parts of South which can be of help to our company because it complements our strength in the north and the east.

Q: How will Berger Paints fund this acquisition, will it be via debt or internal accruals of the company?

A: Full funding will be via internal accruals.

Q: Since you all are looking at some amount of inorganic initiatives or have, can you give us some sense in terms of how aggressive are you possibly going to be in the Indian market in terms of acquiring other paint companies besides Sherwin Williams?

A: We will look for suitable opportunities. If there is any thing value able then we will definitely look at that.