Press Release Details
Fairfax India to Acquire 45% of ADI Finechem Limited and to Make an Open Offer for an Additional 26% of ADI Finechem Limited
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(Note: All dollar amounts in this news release are expressed in U.S. dollars, except as otherwise noted.)
Fairfax India Holdings Corporation (TSX:FIH.U) is pleased to announce that, through its wholly-owned subsidiaries (collectively, “Fairfax India”), it has entered into an agreement with existing shareholders of ADI Finechem Limited (“ADI”) to acquire approximately 45% of the outstanding shares of ADI at a price per share of INR 212 per share (collectively, the “Shareholder Transaction”) for total consideration of approximately INR 1.3 billion (approximately $20 million at current exchange rates).
ADI’s shares are listed on the Bombay Stock Exchange and National Stock Exchange. As a result of such listings, Fairfax India will also make an open offer (the “Open Offer”) for an additional 26% of the shares outstanding of ADI in accordance with applicable regulations of the Securities and Exchange Board of India (“SEBI”).
The Shareholder Transaction is subject to customary conditions precedent (including the completion of the Open Offer). Both transactions are expected to concurrently close in the first quarter of 2016.
ADI is a speciality chemical manufacturer located near Ahmedabad, Gujarat. ADI manufactures oleo chemicals used in the paints, inks and adhesives industries, as well as intermediate nutraceutical and health products. By leveraging its innovative process, ADI is able to convert readily-available agricultural waste products into value added specialty chemicals.
“We look forward to investing in ADI which, under the leadership of its Managing Director, Nahoosh Jariwala and his experienced management team, will continue to grow its operations over the long term. This investment fits within our strategy of investing in well-managed companies with a history of profitability and high integrity,” said Prem Watsa, Chairman of Fairfax India.
Following this investment by Fairfax India, ADI will continue to operate independently under the guidance of Mr. Utkarsh Shah, the current Chairman and under the leadership of Mr. Nahoosh Jariwala, the current Managing Director.
Mr. Nahoosh Jariwala, welcoming this investment, said, “We are extremely pleased to have Fairfax India as a committed long term investor as we are confident that we can continue to grow the business in the long term for the benefit of all stakeholders.”
About Fairfax India
Fairfax India is an investment holding company whose objective is to achieve long-term capital appreciation, while preserving capital, by investing in public and private equity securities and debt instruments in India and Indian businesses or other businesses with customers, suppliers or business primarily conducted in, or dependent on, India.
Fairfax India Holdings Corporation
Chief Financial Officer