Indigo Paints, one of India’s leading paint companies, has acquired a 51% controlling stake in Apple Chemie India Private Limited (ACIPL), a rapidly growing firm specializing in construction chemicals and waterproofing.
The acquisition was a combination of primary capital infusion and secondary share purchase transactions with the promoters, with Indigo Paints having the option to acquire an additional stake in Apple Chemie after three years.
ACIPL: A Strong Track Record of Growth and Profitability
Apple Chemie India Private Limited has been achieving significant growth with a five-year compound annual growth rate (CAGR) of around 30% and reported sales of Rs. 320 million in FY 22, which is expected to grow to over Rs. 410 million in FY 23. The company’s success is credited to its leading promoter, Vivek Naik, a former national President of Indian Concrete Institute, and his son Rohit Naik, who have built a marquee client base in the B2B space, supplying products to various reputed infrastructure projects in the western states of India.
Entering the Construction Chemicals and Waterproofing Space
With this partnership, Indigo Paints is entering the adjacent areas of construction chemicals and waterproofing space. The target market for these products is estimated to be worth more than Rs. 150 billion and is expected to grow in double digits. ACIPL will continue to lead the company and expand its business pan-India in the B2B segment. Indigo Paints will be able to widen its product offerings and launch a full range of waterproofing and construction chemicals, targeting retail consumers.
Leadership Comments
Hemant Jalan, CMD of Indigo Paints, expressed his optimism about the acquisition, stating that “Apple Chemie has a wide range of products complementary to Indigo Paints. They also have a marquee clientele that includes all major engineering and construction conglomerates in the country. With the government’s massive infrastructure spending plan and the established client base, Apple Chemie is primed to become a pan-India player.”
Vivek Naik, MD of Apple Chemie India, is excited about the partnership and believes that “this partnership will help us maximize the business potential, leveraging on the wide distribution infrastructure of Indigo Paints, and grow Apple Chemie into a national brand.”
Transaction Advisors Acquizon Advisory, Acumen M&A Advisors, and Clove Legal acted as advisors to Indigo Paints, while Kreo Capital and Amit Rajkotia & Associates acted as advisors to Apple Chemie India for this transaction.