PVC pipe and plastic products maker Astral will acquire 51 per cent stake in Gem Paints. This deal has been done for Rs 194 crore. Astral, which is trying to build its portfolio in the paint business, has announced this acquisition agreement. According to this, it has entered into a conclusive agreement with Gem Paints and its shareholders after the deal is approved by the company’s board of directors.
Astral said it would initially invest Rs 194 crore in Gem Paints Pvt Ltd as part of the all-cash deal. The amount will be used for purchase of Optionally Convertible Debentures equivalent to 51 per cent equity stake value of the paint business of Gem Paints. Astral said the remaining 49 per cent equity stake in Gem Paints would be paid in installments over a period of five years as per the share purchase agreement.
Sandeep Engineer, Managing Director, Astral said, “The acquisition of Gem Paints will be a great addition to Astral’s product portfolio. I am sure this will take the brand value of Astral to new heights.”
It is proposed to demerge the operating paint business of Gem Paints into a wholly owned subsidiary, Isha Paints. The deal is expected to be concluded by March 31, 2023.
Gem Paints is active in Paint business: Formed in January 1980, Gem Paints is in the business of manufacturing and supplying a variety of paints, varnishes, home decor and industrial paint related products. It has done a business of Rs 215 crore in the financial year 2021-22.