Gulf Oil Corporation Ltd, a Hinduja Group company, has acquired Houghton International for $1.045 billion (about Rs 5,685 crore) through its subsidiary based in the United Kingdom.
This acquisition of 100 per cent stake in Houghton, a US-based global player in metal working fluids for industrial use, is subject to regulatory approvals.
The Hyderabad-based listed company signed an agreement for the acquisition on November 6, with the seller, a US-based private equity fund AEA Investors.
Subhas Pramanik, Managing Director, Gulf Oil, told Business Line: “This acquisition fits well into the company’s plan to be present across various segments of lubricants. We wanted to be in industrial and other specialised segments, and Houghton helps cover the full spectrum.”
“We expect to close this acquisition by December end,” he said, adding that there were various synergies that could be achieved in manufacturing, strategic sourcing and distribution.
The deal is expected to strengthen Gulf Oil’s lubricant business in the automotive sector. The Indian major has acquired the US-based company that has thrice its (Gulf Oil’s) revenues and 10 times the EBITDA.
Houghton recorded, on a 12-month basis ending September, sales of $858 million and adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) of $132 million.
The US-based private equity fund AEA Investors had acquired Houghton in 2007. Houghton is into metal working fluids (MWF), and is especially strong in the North American and European markets. Since then, it has been on an acquisition spree and bought out Stuart Holdings GmbH as also Shell’s MWF business late last year.
Gulf Oil, in a statement to the BSE, has indicated it plans to operate Houghton as a separate company and the rest of Gulf’s operations will be able to use the US firm’s extensive base of industrial customers.
It is the second biggest acquisition by an Indian company this year. Rain Commodities had reached an agreement to buy Belgium-based speciality chemicals group Ruetgers in a $918-million deal.
Gulf Oil shares closed at Rs 86.35 on the BSE, down 1.43 per cent.
rishikumar.vundi@thehindu.co.in
amritanair.ghaswalla@thehindu.co.in
A letter from the Editor
Dear Readers,
The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.
Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.
In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.
We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.
But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.
I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.
A little help from you can make a huge difference to the cause of quality journalism!
Sincerely,
Support Quality Journalism
Please Email the Editor