Dhanuka Agritech (507717) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of international rights for Iprovalicarb and Triadimenol aims to expand presence in over 20 countries, including key markets in Latin America, MEA, Europe, and Asia.

• The deal supports a long-term vision to establish a global footprint and leverage existing customer bases for future product launches.

• Dhanuka established an International Sales division two years ago to support global expansion.

• Access to established brands and markets, especially in Brazil and Asia, provides entry barriers for competitors.

• Acquired products are registered in multiple countries with established customer bases.

Financial terms and conditions

• Total purchase price for both products is approximately INR 167 crore.

• Combined global revenue for these products was about INR 224 crore in 2023, with an estimated decline to INR 186 crore in 2024.

• Peak revenue reached INR 245 crore in 2022.

Synergies and expected cost savings

• Manufacturing of Iprovalicarb will be shifted to India, utilizing the Dahej facility, potentially reducing costs.

• Plans to shift production to Dhanuka's own manufacturing facilities for cost optimization.

• Opportunity to source other technical ingredients from generic sources to achieve further cost savings.

• Expected to maintain EBITDA margins at current levels despite slightly lower gross margins.