Excel Crop Care To Merge With Promoter Sumitomo Chemical India

Pesticides maker Excel Crop Care Ltd. said its board approved its merger with promoter Sumitomo Chemical India Ltd. as it looks to drive synergies.

Existing shareholding of Sumitomo Chemical India in Excel Crop Care will get cancelled, the company said in an exchange filing. Public shareholders will receive 51 equity shares of Sumitomo Chemical India for every two held in Excel Crop Care. The merger, subject to regulatory approvals, is expected to be completed in eight to 14 months.

Financials

Sumitomo Chemical India makes and sells crop protection formulations. The company’s operating revenue for the year ended March stood at Rs 862.5 crore. The earnings before interest, tax, depreciation and amortisation came at Rs 109.5 crore during the year.

Key Highlights

• Excel Crop Care is a generic-focused company, while Sumitomo Chemical India is more focused on specialty chemicals (63 percent of sales).
• The merged entity will have five plants in western India and a combined distributor network of more than 13,000 across the country.
• The proposed merger also reduces the risk of seasonality as the company will have a presence across the complete range of products covering both kharif and rabi crops
• The contribution of the top five customers for the merged entity is expected to be less than 10 percent, reducing the risk of customer concentration.

Fresh Listing

Promoter holding at Sumitomo Chemical India, wholly owned by Japanese conglomerate Sumitomo Group, will fall to 80.30 percent, according to the share-swap ratio. But the company will have to sell an additional 5.30 percent to meet the minimum public shareholding requirement for listing.