Technology

UPL Corporation Ltd, international arm of the UPL (United Phosphorus Ltd), has entered into an agreement to acquire Arystra Lifesciences for US$4.2bn, making it to Top 5 in the world. UPL will now have sales of US$5bn &
20%+EBDITA margins (presynergies).Transaction provides UPL a perfect match with powerful synergies across geographies, crops and products, strengthened through best-in-class manufacturing & differentiated R&D
capabilities. Acquisition is funded part by equity of US$1.2bn & Debt of US$3bn. It expects Net Debt/ EBDITA of 2.5-2.7x after accounting for synergies V/s 3.2-3.5x as of now. On EPS front, the transaction will add
Rs10-12 in FY2020. The merger is expected to close in late CY2018 and early CY2019. We recommend a HOLD.

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