Godrej Agrovet to buy 45.29% in Astec LifeSciences
31 August 2015
Godrej Agrovet Ltd, agri-business subsidiary of Godrej Industries Ltd, will buy 45.29-per cent stake in agrochemicals and pharmaceutical intermediates firm Astec LifeSciences Ltd from its promoters for around Rs212 crore.
The board of directors of Godrej Agrovet on Saturday said they have approved execution of a share purchase agreement with promoters of Astec LifeSciences.
The acquisition of the promoter's stake in Astec LifeSciences is being made at Rs190 a share, which is a huge discount to the company's current market price of Rs242.25 on the NSE.
Godrej Agrovet will also acquire Astec LifeSciences' wholly-owned subsidiary Astec Corp Care Pvt Ltd, both the companies said in a disclosure to the exchanges.
''Further, such share purchase agreement sets out certain shareholders' rights and obligations between Godrej Agrovet and the remaining promoters of the company,'' Godrej Agrovet said in a filing with the BSE.
Currently, the promoters control 55.29-per cent stake in Ateck LifeSciences.
Following the deal, Godrej Agrovet will make a mandatory open offer to the shareholders of Astec LifeSciences.
Godrej group may buy additional stake from the promoters if it fails to gain majority control in Asteck LifeSciences after the open offer.
''Depending on the response of the open offer, Godrej Agrovet may acquire additional shares from the promoters such that Godrej Agrovet's totals holding reaches 50% plus 1 share of the fully diluted equity share capital of the Astec LifeSciences after the completion of the open offer,'' Godrej Agrovet said.
''The board of directors of GAVL (Godrej Agrovet) believe that GAVL will benefit from the company's expertise and string market position in agri-business,'' Godrej Industries said in the notice.
Godrej Agrovet expects to benefit from Astec LifeSciences' expertise and strong market position in agri business while the induction of a majority shareholder will significantly enhance Astec LifeSciences's growth prospects and competitive position.
Kotak Mahindra Capital Co Ltd acted as exclusive financial advisor to Godrej Agrovet for this transaction.
The transaction is subject to various conditions precedent, which include the sale of the equity shares held by the Astec LifeSciences of Astec Crop Care Pvt Ltd (ACCPL), a wholly owned subsidiary of the company.
In this regard, the board of directors of the Astec LifeSceinces has also approved execution of a share purchase agreement, whereby the company has agreed to sell up to 100% of the total paid-up equity share capital of ACCPL to Ashok Hiremath and PL Tiwari, the promoters of the company for an aggregate consideration of not less than Rs50 lakh, which is more than the fair value of ACCPL as per valuation reports provided by independent valuers.
Astec LifeSciences has also informed BSE on a separate filing about the proposed transaction.
KPMG Corporate Finance acted as exclusive financial advisor to Astec LifeSciences and promoters for this transaction.
Astec was established in 1994 with a focus on the Agrochemical and pharmaceutical industries. Today, the company manufactures a wide range of agrochemical active ingredients and pharmaceutical intermediates.
Astec has also forged enduring relationships with large and small companies all over the world.