The RP-Sanjiv Goenka Group, along with Bain Capital and Dorf Ketal, is reportedly in talks to acquire Pune-based specialty chemicals firm, AquaPharm Chemicals, for a valuation of over Rs 4,500 crore. The acquisition, if successful, would mark a significant development in the Indian chemical sector and provide potential investors an opportunity to tap into the growing demand for specialty chemicals.
Aquapharm Chemicals, promoted by V K Mangwani, specializes in the production of water treatment chemicals, including phosphonates, polymers, biocides, and pharmaceutical intermediaries. These chemicals find applications in various industries, such as detergents, paper, textile, pharmaceuticals, personal care, water treatment, and leather manufacturing.
The company operates manufacturing facilities in Pirangut and Mahad, Maharashtra, with a combined installed capacity of 70,000 tonnes. AquaPharm also holds subsidiaries in Saudi Arabia, Hong Kong, Europe, and the US, and a significant portion of its business comes from exports to Europe and North America.
According to sources, the promoters of AquaPharm are considering selling their entire shareholding in the company, making way for potential buyers to acquire a substantial stake.
Stifel Financial Corp has been appointed as the banker for the proposed transaction, facilitating the deal’s smooth execution.
Aquapharm Chemicals has been on an expansion trajectory, as evident from its previous acquisitions. In 2018, the company acquired US-based Aquapharm Chemicals LLC, which focuses on producing specialty chemicals for the oil and gas sector. Additionally, in 2019, AquaPharm took over Saudi Arabia-based Unique Solutions for Chemical Industries Co., which specializes in desalination plants and holds major contracts with a government agency in Saudi Arabia.
In FY2022, AquaPharm’s consolidated net sales reached Rs 1,616.4 crore, with an earnings before interest taxes, depreciation, and amortization (EBITDA) of Rs 423.3 crore. The previous fiscal year, FY21, saw consolidated net sales at Rs 919.8 crore, with an EBITDA of Rs 159 crore.
Crisil Ratings, in its report, noted AquaPharm’s significant presence in the global phosphonates sector, attributing it to healthy relationships with domestic and international customers, including Procter and Gamble, Henkel AG, Ecolab Inc, Buckman Laboratories International Inc, and Unilever.
Furthermore, AquaPharm stands to benefit from the “China-plus-one” policy adopted by customers, which aims to diversify sourcing beyond China, leading to potential moderate revenue growth in the medium term.
