- 27 Jun 2024
- ICICI Securities
PI Industries to acquire UK based agriculture protein/ peptide technology player
PIIND - 3881 Change: 34.90 (0.91 %)News: The target company, named Plant Health Care Plc (PHC), possess industry-leading knowledge, products, IP and experience in protein/ peptide technology in the agricultural biological space with subsidiaries in the US, Brazil, Mexico and a few other countries. PHC had consolidated revenue of ~US$ 11 million with a gross margin of 60% for the year ended 31st December 2023. The offered purchase consideration of ~US$ 41.3 million is proposed to be paid in cash and funded from the earlier Qualified Institutional Placement (QIP) proceeds.
Views: The deal at 3.75x sales looks slightly pricey, however given the superior GPM profile of 60% (PI GPM at ~49%) it looks fair. PI is looking to expedite growth in the agricultural biologics space. As per one industry estimate, Agricultural biologics are growing at a CAGR of 13% and are expected to reach US$18 billion by 2028, with US and LATAM accounting for 52% of the global market. PI already has a portfolio of 8 products and many more in the development & registration pipeline. Revenue from biological products increased by ~29% in FY24.
Impact: Positive