PCBL acquiring Aquapharm | inves4: Indian Equity Investing

Aquapharm Chemicals Private Limited (ACPL), founded in 1974, is a private company engaged in the business of manufacturing specialty chemiclas offering water treatment solutions to global customers across diverse end-markets.
- Focus includes water treatment chemicals like phosphonates, biodegradable chelating agents, polymers, biocides, oil field chemicals (imidazoline, quats), which have application in water treatment (desalination, reverse osmosis, scale inhibitors), detergents, industrial cleaners, oil fields, municipal water treatment, pulp and paper, water softening, surface cleaning, pharma, agrochem applications.
ACPL had reported revenues of Rs 943 cr, Rs 1,654 cr and Rs 2,045 cr during FY 21, 22, and 23 respectively
- EBITDA was Rs 159 cr, Rs 423 cr and Rs 417 respectively during those years
- For quick comparison, PCBL had reported revenues of Rs 5,774 cr during FY 23 and EBITDA of Rs 731 cr
It’s 100% acquisition for an aggregate consideration of Rs 3,800 cr
- This implies 1.85x of FY 23 revenues and 9.1x of FY23 EBITDA.
  - PCBL’s current valuations are 1.67x and 13.1x
  - Transaction valuations does seem attractive in the current market context, given that ACPL’s operating profitability seems somewhat better than PCBL’s
- Funding would be through a mix of internal accruals and external fund raise
Transaction, subject to regulatory approvals is expected to conclude with 2-3 months