Chemicals manufacturer SRF Ltd has signed an agreement to sell its engineering plastics business to DSM’s Indian subsidiary DSM Pvt Ltd for $45 million.
Subject to the relevant conditions, the deal is expected to close in six months, SRF said in a statement.
“This marks a significant milestone for our company, as we take another step along our strategic direction of focussing on our core businesses,” said SRF Managing Director Ashish Bharat Ram. “While the engineering plastics business has been a profitable and niche business for us, we felt that scaling it into a large business would have taken significant time. In that sense passing it on to a credible player would be logical for everyone involved.”
Mumbai-based investment banking firm Singhi Advisors was the financial advisor to SRF. SRF’s engineering plastics business recorded sales of $30 million, with a net profit of $13 million, in FY19.
The transaction will enable SRF provide cash and liquidity to strengthen its balance sheet further and to optimize and focus its efforts and resources on developing more-and-more complex technologies within the Chemicals Business Space.
SRF, which has operations in India, Thailand and South Africa and commercial interests in more than 75 countries, manufactures industrial and specialty intermediates. Its portfolio includes technical textiles, fluorochemicals, specialty chemicals, packaging films and engineering plastics.