Murugappa group company EID Parry India Ltd has announced plans to acquire 100 per cent shares of its 51 per cent US-based subsidiary US Nutraceuticals LLC with an additional investment of Rs 24 crore in an effort to increase market presence in the US.
The company has informed the stock exchanges that it signed a share purchase agreement with the existing stakeholders of US Nutraceuticals LLC to increase its stake by purchasing additional units. With this purchase, the total stake of the company in US Nutraceuticals would be 100 per cent, it added.
"This strategic acquisition for having our own subsidiary in US will give us an advantage in expanding our presence in the region. The value for the additional shares to be purchased is around Rs 24 crore," said Ravindra S Singhvi, managing director, EID Parry.
"The acquisition would increase the company's business in US substantially in the next year itself," he said. Post acqusition of the remaining shares, US Nutraceuticais LLC would become a subsidiary of EID Parry with 100 per cent voting rights.
The company currently had sales of $ 20 million in the $ 2 billion nutraceuticals market in the US. It has been selling the products through US Nutraceuticals. With the acquisition, the marketing administration expertise of the US subsidiary would help the company to grow in the market, he added.
Besides selling its own products in US, EID Parry would also manufacture and market products owned by US Nutraceuticals, which in turn would increase its market presence in US.
Out of its $40 million nutraceuticals business, almost $25 million sales reveneu comes from exports. a major share of the total exports of around $ 20 million is to the US market at present, said Singhvi.
In November 2008, the company announced strategic acquisition of 48 per cent stake in US Nutraceuticals, based in Florida, USA, engaged in the nutraceuticals business under the name Valensa International, according to reports.
In the fiscal 2011, the company acquired another three per cent stake in the US firm, increasing its stake to 51 per cent.
