HLE Glascoat Limited - ICRA Updates ratings on announcement of acquisition

On September 17, 2021, HLE Glascoat Limited (HGL) announced that it will purchase 100% of the equity shares in Thaletec GmbH (Thaletec), based in Germany, from the selling shareholders, vide the share purchase agreement dated September 17, 2021. The consideration for the same will be 12 million euro payable in cash (~Rs. 104.00 crore as on date). The deal is expected to be closed in the next three-four months.

Thaletec is engaged in the business of manufacturing specialized glass-lined process equipment/reactors and has its headquarters in Thale, Sachsen-Anhalt, Germany, and a Business Development and Service Centre in North Carolina, USA. The facility has capabilities to manufacture equipment with dimensions of up to 100,000 liters volume. Thaletec operates a 40,000-sq. m., manufacturing facility, with more than 160 employees.

ICRA takes note of the said acquisition/transaction and the ratings remain unchanged at [ICRA]A (Stable)/[ICRA]A2+. The aforementioned acquisition will enhance efficiencies and combine similar business interests for both the entities, resulting in operational synergies, streamlining and optimization of the business. The consolidated revenue and accruals will witness an uptick going forward because of the transaction. The company will utilise the proceeds of Rs. 60.00 crore received from Malabar India Fund in the current fiscal towards the issuance of warrants/equity shares, to fund the transaction. Albeit, as the transaction is to be funded by a mix of equity and debt, it will result in slight moderation of the capital structure and coverage indicators in the near term. Notwithstanding this, the overall financial risk profile and liquidity position will continue to remain comfortable and the transaction is not expected to have a material impact on HGL's credit risk profile.

Shares of HLE GLASCOAT LIMITED was last trading in BSE at Rs. 6375 as compared to the previous close of Rs. 6093.4. The total number of shares traded during the day was 6767 in over 1920 trades.

The stock hit an intraday high of Rs. 6498 and intraday low of 5920.1. The net turnover during the day was Rs. 42320717.

Source : Equity Bulls

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