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| EID Parry gulps Sadashiva Sugars for Rs 50 crore |
| BS Reporter / Chennai Oct 11, 2009, 00:24 IST |
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EID Parry (India) of the Chennai-based Rs 15,646-crore Murugappa Group has acquired a 76 per cent equity stake in Bangalore-based Sadashiva Sugars for Rs 50 crore.
EID Parry (India) Vice-president (finance) P Gopalakrishnan said the acquisition will help the company spread out of Tamil Nadu and Puducherry to Karnataka.
“This acquisition is a part of the company's growth strategy. Sadashiva Sugars comes with a capacity of 2,500 TCD (tonnes of sugarcane crushed per day) and has a co-generation capacity of 15.5 mega watt. This is a new unit currently being commissioned,” he added. The unit is known to be under trial production.
EID Parry (India) has a capacity of 19,000 TCD. The acquisition will raise it to 21,500 TCD. EID Parry (India) may decide to expand Sadashiva Sugars' capacity in the future. Asked whether it will acquire the remaining 24 per cent stake held by B S Patil and his family, Gopalakrishnan said: “I am not too sure right now.”
The valuation of sugar companies has risen steadily in the last few months because of the rise in sugar prices. Sector experts expect prices to rule high for at least one more year. The country is expected to end the current financial year as an importer of the commodity.
Commenting on the valuation of Sadashiva Sugars, Gopalakrishnan said: “We did all the due diligence and studied the company; the value which we have paid is reasonable.”
Murugappa Group Vice-chairman, Director (strategy) and Chairman-designate A Vellayan had in a recent interview with the Business Standard said that the group's intention was to grow its sugar, abrasives and pesticide businesses through acquisitions.
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