JB Chemicals gains 4%, nears 52-wk high as PE firm KKR to acquire 54% stake

After this transaction, an open offer will be launched to acquire 20.93 million fully paid-up equity shares of JB Chemicals, representing 26 per cent of equity.

Shares of J.B Chemicals and Pharmaceuticals surged 3.7 per cent to Rs 742 apiece on the BSE on Friday after the company said global investment firm KKR & Co. Inc. will pick up a controlling stake in the company. As part of the deal, KKR will acquire stake from the founding Mody family at Rs 745 per share, or at 5 per cent premium to Thursday's closing price of Rs 715 on the BSE.

"KKR has entered into an agreement to acquire 41.7 million equity shares of JB Chemicals, representing 54 per cent, from the promoters of the company," said a company statement on Thursday.

After this transaction, an open offer will be launched to acquire 20.93 million fully paid-up equity shares of JB Chemicals, representing 26 per cent. The open offer, too, is being made at a price of Rs 745 per share, it added. READ HERE

According to the filing, once the buyer has acquired 54 per cent stake, the sellers have the right to sell additional equity shares ensuring KKR’s aggregate shareholding in JB Chemicals does not exceed 64.9 per cent.

At 9:43 am, the stock pared its gains and was trading 0.96 per cen higher at Rs 722.3, as against little changed S&P BSE Sensex at 35,876.65 level. The stock reached close to its 52-week high level of Rs 743 hit on June 22, 2020. So far in the financial year 2020-21 (FY21), the stock has rallied 41 per cent till Thursday, BSE data shows. In comparison, the benchmark Sensex has gained 21.6 per cent during the period.

During the March quarter, the company's consolidated net profit grew 7 per cent year-on-year to Rs 50.07 crore, while the consolidated profit before tax (PBT) slipped 1.8 per cent to Rs 67.02 crore as against Rs 68.28 crore in Q4FY19.  

Besides, consolidated EBITDA jumped 40 per cent to Rs 91.70 crore during the March quarter compared to Rs 65.50 crore in Q4FY19. Consolidated EBITDA margin improved to 20.67 per cent in Q4FY20 from 15.64 per cent in Q4FY19.