Astral Poly Technik buy 76% stake in adhesive maker Resinova for Rs 213 cr

Astral Poly Technik Ltd, the Ahmedabad-based manufacturer of chlorinated polyvinyl chloride (CPVC) pipes and fittings, has acquired 76 per cent stake in epoxy adhesives player Resinova Chemie Ltd for Rs 212.8 crore. The transaction values Resinova at an enterprise valuation of Rs 289 crore.
 
Resinova is engaged in manufacturing and marketing of a highly diversified range of adhesives and sealants in chemistries based on epoxy adhesives, acrylics, UV cure, and cyanoacrylates, silicones, anaerobic, PVA, etc. Resinova’s products have varied applications including automobile, construction, chemicals, engineering, industrial, furniture, sanitary and household sectors.
 
The acquisition will synergise with Astral’s existing pipes and fittings businesses by deepening and widening its product offerings.
 
Sandeep Engineer, managing director, Astral Poly Technik Ltd, said, “Astral has established itself as a strong participant in the CPVC pipes and fittings sector and has gained recognition as a progressive player in the other related sectors. We see the adhesives business as the logical next step in building the Astral franchise. In high growth Indian adhesive market, the Resinova acquisition provides a strong platform which is highly complementary to Astral’s strengths. We see tremendous growth opportunities and are excited with the prospects to create lasting value for our shareholders."
 
On its part, Resinova sells its products in around 50 brands and 600 SKUs with some of the key brands of the company being Bondtite, Resibond, Bondset, Solvobond, Vetra, Brushbond and Zesta.
 
Earlier in August 2014, Astral acquired 80 per cent stake in the US based Seal It Services Ltd (‘Seal-It’) which is engaged in manufacturing and selling a comprehensive range of sealants, adhesives, water proofing, cleaning products, tape & paints, and PVA, used mainly in construction sector. Its products are sold under the brand name ‘Bond-It’.  On the other hand, Astral also manufactures and sells plumbing adhesives in India under the brand name ‘Weld On’ through its wholly owned subsidiary.
 
According to Engineer, the combined brand development, product innovation skills and distribution reach of Astral, Seal-It and Resinova will enable building a robust and valuable adhesive business. The company hopes to widen the presence of Resinova by products, by geography and by customer segments.
 
“This strategic move between two fast growing companies in synergistic sectors has exceptional potential to develop the adhesive market in India. Combined with Astral’s presence in international markets, thrust will be on using technical strength and distribution network of both companies to harness the potential of this business,” said Vijay Parikh, managing director of Resinova which had revenues of Rs 218 crore for the 12 months period ending September 30, 2014.
 
Resinova’s supply chain network consists of 11 branch offices and more than 1700 channel partners reaching out to around 400,000 retail outlets across India.