India’s Kansai Nerolac Paints Ltd says it has agreed to acquire 55 per cent equity stake in Bangladesh-based RAK Paints Ltd for Tk 572.6 million or around $7.0 million.
The Mumbai-based firm said in a stock exchange disclosure on Tuesday that the cash deal aimed at entering the “high-growth market in Bangladesh”, according to a report by The VCCircle Network.
Kansai Nerolac said it expects the transaction to be completed by July 31, subject to certain conditions.
Established in 2009, decorative and industrial paints maker RAK had a turnover of over Tk 1.0 billion as of June 30 last year, The VCCircle said.
“Our company intends to establish a competitive paint manufacturing business in Bangladesh,” Kansai Nerolac said in the stock exchange filing.
The deal comes two months after Kansai Nerolac said it would acquire Indian powder coatings maker Marpol.
With more two-wheeler manufacturers looking to set up plants in Bangladesh, the deal will help Kansai Nerolac get larger business in the market, according to the company’s Vice Chairman and Managing Director HM Bharuka.
Kansai Nerolac is a subsidiary of Japan-based Kansai Paint Company Ltd.
As on December 31 last year, Kansai Paint held 74.99 per cent stake in the company that has four plants in India, reports bdnews24.
The company’s net sales stood at around Rs 4.8 billion in the financial year 2017-2018 as it turned a net profit of around Rs 5.14 billion.
