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Ami Organics Limited, manufacturer of advanced pharmaceutical intermediates and speciality chemicals, on Monday announced its venture into the semiconductor industry following a board nod for acquisition of 55 per cent partnership interest in Baba Fine Chemicals (BFC), which focuseson custom synthesis and manufacturing of intermediates.
Ami Organics will acquire the partnership interest in BFC from two existing partners at ₹68.2 crore, subject to adjustments as required at closing stage. The third partner at BFC, namely Rakesh Gupta, will continue to stay on the board and lead marketing and technical development for BFC. The deal is valued at 4x of adjusted EBITDA for FY23, a statement said.
The acquisition will be funded through a combination of cash and issuance of securities of the company to the exiting parties on a preferential basis.
“This acquisition heralds Ami Organics’ foray into the high entry barrier semiconductor industry,” a company statement said.
Ami Organics has already developed two electrolyte additives used as solid electrolyte interface in lithium-ion-batteries and these are awaiting commercial orders. On the synergies from the acquisition, Ami Organics stated that it would give the company access to the complementing products of Baba Fine Chemicals that are also focused on the electronic industry, mainly semiconductors.
Naresh Patel, Executive Chairman and Managing Director, Ami Organics Limited, said, “This partnership provides us with the impetus to make a mark in the lucrative and high entry barrier semiconductor industry. Our synergies will help scale up BFC’s niche product basket, given that they are the only manufacturers in the country in their product category. The acquisition is in line with our focus of expanding our presence in complex speciality chemicals industry and will complement our product basket of electronic chemicals.”
Rakesh Gupta, Partner, Baba Fine Chemicals, said, “Ami Organics has a strong track record of developing products using advance technologies in higher volumes, which makes them a perfect match for us. I believe our R&D strengths and Ami’s operational excellence will help us grow manifold in the coming years.”
Ami Organics shares ended in red on Tuesday to close at ₹1,039.65, down 2.20 per cent from the previous close on the NSE.
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