Anupam Rasayan India Ltd has provided comprehensive details about its strategic acquisition of Jayhawk Fine Chemicals during an investor conference call, revealing the transaction structure and integration plans for the USD 150 million deal.

Acquisition Structure and Financial Details

The company has structured the acquisition through a balanced funding approach, with Anupam Rasayan investing USD 40 million through a combination of internal accruals and debt. The remaining USD 110 million is being invested by a leading global investment management firm through Class B non-voting shares, enabling full consolidation of Jayhawk's operations.

Strategic Rationale and Business Integration

Managing Director Anand Desai outlined five key strategic benefits of the acquisition. The deal establishes onshore manufacturing presence in the United States, significantly enhancing engagement with multinational customers who value geographical diversification and supply chain resilience. The acquisition expands Anupam's performance materials portfolio, particularly in high-value di-anhydrides and polyimide intermediates with applications in semiconductors, aviation, and electronics.

Jayhawk's Operational Profile

Jayhawk Fine Chemicals reported approximately USD 78 million revenue with EBITDA margins of around 19%. The revenue mix comprises 65% from performance materials and 35% from life science-related molecules, providing stability and growth visibility. The US facility spans nearly three million square meters with two manufacturing units and a pilot plant.

Combined Entity Projections

On a pro-forma basis, the combined entity would have revenues of approximately USD 243 million and EBITDA of approximately USD 61 million. CEO Gopal Agrawal indicated that the acquisition is expected to be EPS-accretive from day one, with the transaction scheduled to close in the second half of January.

Integration Strategy and Growth Plans

The company plans to create a powerful dual-site production model, combining Jayhawk's high-priority technology and advanced operations with Anupam's cost-efficient, backward-integrated manufacturing base in India. This synergy will offer global customers flexibility of localized US production and a highly integrated supply chain.

The management emphasized that existing Jayhawk operations will continue as-is initially, with selective capacity expansion planned based on customer requirements. The facility has significant expansion potential, with current manufacturing setup occupying only 15-20% of the available land.

The successful completion of this acquisition positions Anupam Rasayan as an integrated global specialty chemicals and CDMO platform, leveraging multi-geographic execution capabilities and strengthened customer relationships across high-growth end markets.

Anupam Rasayan India Limited has been placed on Rating Watch with Negative Implications by both India Ratings and Research (Ind-Ra) and CRISIL Ratings following the company's announcement to acquire Jayhawk Fine Chemicals LLC for USD 150.00 million.

CRISIL Rating Action Details

CRISIL Ratings has placed its ratings on the bank facilities of Anupam Rasayan India Limited on Rating Watch with Negative Implications. The rating action affects total bank loan facilities worth ₹1,369.82 crores.

India Ratings Action

India Ratings has simultaneously placed both the Long Term Issuer Rating and Bank Loan facilities on Rating Watch with Negative Implications pending clarity on the sustainable capital structure post-acquisition.

Acquisition and Funding Structure

Anupam Rasayan announced the acquisition of 100% equity in Jayhawk Fine Chemicals LLC, a US-based specialty chemical company, through a wholly owned US subsidiary. The acquisition will be funded through a structured approach combining debt, equity, and internal accruals.

Jayhawk generated revenue and EBITDA of USD 78.00 million and USD 15.00 million respectively, with net cash of USD 16.00 million. The acquisition translates to an enterprise value of USD 134.00 million, indicating an EV/EBITDA multiple of around 9x.

Financial Performance and Working Capital Challenges

Anupam Rasayan has demonstrated signs of operational recovery with significant revenue improvement. The company's consolidated quarterly revenue improved to ₹731.40 crores in Q2 from ₹485.80 crores in Q1.

The company continues to face elevated working capital challenges with gross current assets (GCAs) at around 646 days as of March, compared to 530 days in the previous fiscal. Bank limit utilization remained high at over 90% as of September.

Liquidity and Capital Structure

Despite working capital challenges, the company maintains strong liquidity supported by net cash accrual of ₹280-350 crores against nil debt obligation. Cash and equivalents stood at more than ₹413.00 crores as of September.

Rating Outlook and Resolution Timeline

Both rating agencies will resolve the rating watch upon completion of the transaction and receiving clarity on the capital structure. CRISIL Ratings will continue to monitor the management and resolve the watch once it obtains clarity on the funding of the acquisition and the intensity of working capital requirement.

The final terms of debt raise and Class B non-voting share issuance are likely to be finalized over the next few months. The rating agencies will evaluate the final terms to determine their classification as debt or equity, which will critically influence ARIL's leverage and liquidity profiles going forward.