Rossari Biotech buys Unitop Chemicals for Rs 4.21 bn

Mumbai, June 2, 2021

Rossari Biotech Limited – a specialty chemicals manufacturer providing intelligent and sustainable solutions for customers in industries like for home & personal care, textiles, animal health and nutrition, etc – has agreed to acquire Unitop Chemicals Pvt Ltd for Rs 4.21 billion. As per the agreement and subject to customary closing conditions, Rossari will be acquiring 100% of the equity capital of Unitop Chemicals. While 65% of the equity share capital will be acquired upon closure of the transaction, and the balance 35% over the next two years. Rossari plans to fund the investment through cash on balance sheet and doesn’t intend to raise any debt for this acquisition. In April 2021, Rossari concluded a preferential issue of equity aggregating to Rs 300 crore to augment the strength of its balance sheet.

This acquisition brings further dynamics to Rossari’s growth story. It brings synergies and complementary dimensions such as expanded product portfolio, presence in adjoining areas of speciality chemical segments, pooling together of related technologies, larger international exposure, better domestic market reach, well-experienced and competent talent pool and increased end-user industry applications. The combination of Unitop Chemicals with Rossari Biotech will augment the quality and acceleration of the Company’s growth going forward.

Incorporated in the year 1980, Unitop Chemicals is a leading supplier of surfactants, emulsifiers and specialty chemicals to a diversified customer base including large domestic and international companies. It has a strong product portfolio with superior presence in the agrochemicals and oil & gas segment. The company’s key expertise is centered on surfactants, which is one of Rossari’s four core chemistries. Unitop Chemicals has three manufacturing sites in India with a total capacity of about 86,000 MTPA and its key facility in Dahej is at close proximity to Rossari’s existing facility.

In the fiscal year 2020, Unitop Chemicals’ revenues stood at Rs 2.80 billion, with adjusted EBITDA at Rs 430 million. FY2021 unaudited estimated revenues stood at over Rs 3 billion. The company has a healthy balance sheet profile with zero net debt. Unitop Chemicals’ solutions are sold across 25 countries, with exports accounting for 30% of revenues in FY2020.

Commenting on the business update, in a joint statement, Edward Menezes, Promoter & Executive Chairman, Rossari, and Sunil Chari, Promoter & Managing Director, Rossari, said, “We are delighted to accelerate the growth momentum at Rossari. Unitop Chemicals is a natural fit with our operations and brings with it immense synergies and complementary growth dimensions. The acquisition and investment of capital to enable this initiative meet the parameters of operational and financial discipline outlined by our Board. We are excited to drive faster growth with larger revenues, greater technological capabilities, stronger spread of market presence, well-aligned operating segments, and most importantly, a more experienced talent pool with augmented capabilities. I will take this opportunity to thank the entrepreneurs behind Unitop Chemicals to have built a high-quality business, which I am sure together with us will create incremental value for all our stakeholders.”

Axcelus Finserv Private Limited was the sole advisor to Rossari for the transaction. Shardul Amarchand Mangaldas acted as the legal counsel and KPMG assisted in financial and tax due diligence.

Headquartered at Mumbai, Rossari Biotech operates two strategically located manufacturing facilities at Silvassa and Dahej. The company offers tailor-made solutions for home, personal care and performance chemicals (HPPC), textile speciality chemicals and animal health and nutrition (AHN). With differentiated product offerings, Rossari caters to an array of applications across FMCG, home care, industrial cleaning, personal care, textile speciality chemicals, performance chemicals, the animal health and nutrition and pet care businesses.