Anupam Rasayan has signed a definitive agreement to acquire 100% of US-based Jayhawk Fine Chemicals, a move its leadership describes as a significant milestone. In an interview with CNBC TV18, Gopal Agrawal, the Chief Executive Officer of Anupam Rasayan, detailed the strategic rationale and financial structure of the deal, which he termed a "transformative journey" towards becoming a global specialty chemical company.
The transaction is valued at $150 million, comprising an enterprise value of $134 million and $16 million in cash held by Jayhawk. Agrawal explained the proposed funding structure, which involves a $40 million investment from Anupam Rasayan itself. The remaining $110 million is expected to be raised through a quasi-equity structure from a large global financial institution. This is one of the options available with the firm, he said.
This arrangement, Agrawal noted, would grant Anupam Rasayan 100% control and full consolidation of Jayhawk, as the financial partner's investment would not carry voting rights.
Addressing concerns about Jayhawk's lower margins of around 20% compared to Anupam Rasayan's 25-28%, Agrawal outlined a multi-pronged synergy strategy to bridge the gap. He stated this acquisition is a clear step towards near-shoring, a key demand from customers. The deal provides Anupam with access to niche chemistries like oxidation and Suzuki, which are complementary to its existing expertise.
Furthermore, the acquisition significantly rebalances the company's business mix. Post-acquisition, the high-growth performance materials segment, which serves industries like aviation, semiconductors, and electricals, will constitute approximately 35% of the combined entity's revenue, up from just 12% for Anupam Rasayan currently. The agrochemicals segment will account for 40-45%, with the rest coming from personal care and pharma. Agrawal highlighted that Jayhawk holds a near-monopoly position in certain high-purity process chemicals, with a business built on decades-long customer relationships.
Agrawal expressed confidence in expanding Jayhawk's margins to a level closer to Anupam's "in the near term." A key driver for this is the significant untapped potential at Jayhawk's manufacturing site. The facility has a large land bank, of which only 15-20% is currently utilised. "This has been one of the biggest drivers for us as well because it allows us to expand our product offering to the customers," he said. This available capacity will enable faster expansion and margin improvement.
Regarding future growth, while declining to give specific guidance, Agrawal pointed out that Jayhawk's key end-markets, such as aviation and semiconductors, are growing at a pace of 20-30% annually. He also reassured that the deal would not significantly increase debt, noting that Anupam has practically no term debt and Jayhawk comes with $16 million in cash. He concluded by emphasising the value of Jayhawk’s experienced management team, calling them the "biggest asset" that Anupam will act as a "catalyst" to foster further growth.
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