Coromandel International acquires 42.2% in Sabero Organics

NEW DELHI: Coromandel International has acquired 42.2% (entire existing promoter stake) in Sabero Organics at Rs 160 per share and will also pay Non-compete fees of Rs 38.47 per share to promoters. Sabero was quoting at Rs 89 on BSE in yesterday’s closing.

CIL will also acquire upto 31% stake in its open offer. The acquisition is expected to help CIL to enhance its offerings on pesticides. This complements its strategy of evolving as a focussed agri input player with less dependence on subsidies from the government, rather than just a fertiliser company.

On the deal valuation, sectoral analyst Tarun Surana of Sunidhi Securities Mumbai said "CIL has paid P/E of 51x, EV/EBIDTA of 15.6x, P/Bv of 5.9x and Market cap of 1.3x based on open offer price of Rs 160 per share for FY11 financials of Sabero.

If we consider acquisition price of Rs 198.47 per share (inclusive of Non compete fees), CIL has paid P/E of 63.2x, EV/EBIDTA of 18.8x, P/Bv of 7.3x and Market cap of 1.6x"