Neogen Chemicals jumped 5.69% to Rs 1,362.90 after the company's board approved to acquire 100% satke in BuLi Chemicals India for an amount up to Rs 25 crore.
BuLi Chem is a subsidiary of a foreign company owned by Livent USA Corporation. It owns the technology to manufacture N Butyl Lithium and other organolithium products using lithium metal, which are key reagents for lithiation reaction used in manufacturing of several complex pharmaceutical and agrochemical intermediates. BuLi Chem manufactures and supplies N Butyl Lithium to several leading pharma and agrochemical companies in India and across the world, and is built one of the very few commercial facilities outside of China for this chemistry. Its turnover for financial year 2021-2022 was Rs 65,27,85,364.The company entered into definitive agreement with Livent Corporation to acquire 4,69,26,000 (100%) shares of BuLi Chem for cash consideration of Rs 25 crore and it is expected to complete within 60 days from the date of signing SPA.
Further, the board has also approved the draft of share purchase agreement (SPA) which was placed before for purchase of 100% equity shares of BuLi Chem from Livent USA Corporation and Livent Corporation. Pursuant to the said transaction BuLi Chem will become a wholly owned subsidiary of the company.
Dr. Harin Kanani, managing director at Neogen Chemicals, said, We are glad to be acquiring BuLi Chem, which houses the Indian operations of Livent USA Corp - one of the global leaders in speciality lithium technology. They have managed to develop one of the few facilities outside of China for this chemistry with strong track record in safety and sustainability.
Organo Lithium compounds are important in manufacturing several critical Pharmaceuticals and Agrochemicals intermediates, and we are happy to continue our association and serve this essential need of the society. The technology to use highly reactive Lithium metal and to manufacture N Butyl Lithium and other Organo Lithium derivatives in-house along with Neogen's ability to recycle Lithium, will give significant competitive advantage to our existing as well as under-development Pharma Advanced intermediates and CSM projects.
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Walter Czarnecki, chief commercial officer at Livent, said, Neogen is focused on the pharmaceuticals and chemicals market in India and shares Livent's commitment to employees and local communities. We look forward to seeing this facility and our former colleagues thrive under the new ownership and will do everything we can to support a smooth transition.
Neogen Chemicals is engaged in the business of manufacturing of eco - friendly speciality chemicals which are used in Pharmaceutical, Engineering & Agro-Chemical industries.
On consolidated basis, the company's net profit rose 40.4% to Rs 14.69 crore in Q3 FY23 as compared to Rs 10.46 crore in Q3 FY22. Net sales jumped 40% year on year to Rs 186.25 crore in Q3 FY23.
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