Huber Group, the world's fifth largest printing ink maker, is taking over Micro Inks in one of the largest acquisitions in the recent past.
MHM Holding GmbH, a part of Huber Group, has struck an agreement with the Bilakhia family, promoters of Micro Inks, to purchase up to 59.06 per cent stake for Rs 991.5 crore (Rs 9.91 billion), putting the valuation of the company at nearly Rs 1,679 crore (Rs 16.79 billion).
The agreement has been reached for Rs 675 a share, 7.63 per cent higher than Tuesday's closing price of the stock at Rs 627.15 on the Bombay Stock Exchange.
Bilakhia Holdings Private Ltd, the investment arm of the Bilakhia family, and other members, namely Anjum, Jakirhusen and Yunus Bilakhiya, jointly hold 63.5 per cent in the company.
To begin with, the German company has agreed to buy a minimum of 50.5 per cent stake from the promoters, according to the share purchase agreement. It will acquire up to 2,128,031 shares representing 8.56 per cent stake, depending on the response to the mandatory 20 per cent open offer so that its holding does not cross 70.5 per cent.
The transaction is expected to be completed by early 2006.
While Huber would appoint the majority of Micro Inks board members, the Bilakhias' representative would continue to hold the position of chairman and managing director, according to a Micro Inks press release this evening. In addition, Huber Group will appoint an executive vice-chairman and managing director.
The Bilakhias will acquire a 46 per cent stake in a European subsidiary of Huber -- Stehlin & Hostag AG. Both parties envisage that this joint venture can be a precursor to increasing the level of the partnership between them.
Huber manufactures inks since 1765 and has 29 plants in Europe and North America. Micro Inks is a new entrant to the global printing ink market, having presence in India and North America.
After this transaction, the consolidated annual sales of Huber Group will be approximately $900 million.
Kotak Investment Banking is the financial adviser to the transaction.