Ester Industries Limited, India’s leading manufacturer of Polyester Films and Specialty Polymers, has entered into a definitive agreement to sell its Engineering Plastic Business to Radici Plastics India Private Limited, engaged in the business of manufacturing of engineering plastic products in an all-cash slump sales transaction, amounting to Rs. 289.33 crore.

 

The transaction enables the Ester Industries’ management to better focus on its core business of developing niche and complex products within its core Polyester Films and Specialty Polymer businesses. Furthermore, the proceeds from the transaction will not only result in stronger balance sheet for Ester Industries but also provide the requisite growth capital for scaling up its capacities in business areas wherein the company believes there is opportunity to enhance value.

 

The company's Engineering Plastics business manufactured multiple grades of engineering plastic products, catering to various industries like automotive, electrical & electronics, consumer durables, telecom, and other industrial applications. The transaction with a global major in the engineering plastics space is also a reflection of Ester Industries’ ability to build a new business and create value. Some of the company’s talented human resources will now be part of Radici Plastics India Private Limited.

 

Commenting on the transaction, Arvind Singhania, Chairman and CEO, Ester Industries Limited said, "Today unfolds a significant chapter in our company, as we take another meaningful step towards our strategic direction of focusing on our core businesses namely packaging films and specialty polymers where we have proven and well-established capabilities and competencies. While the Engineering Plastics Business has been profitable for the company specially in the last two years, this business was essentially non – core and was also ideal for divestment to release capital for core businesses of the company. We believe that scaling it up into a large business would have taken significant resources & time and in that sense passing it onto a globally recognized & credible player would be the most logical step for everyone involved."

 

Ester Industries will continue to work towards building innovative and path-breaking products in its Specialty Polymer business besides improving its mix in Film business by increasing the share of value-added products.

 

The deal was exclusively advised by Singhi Advisors, Mumbai as financial advisors to the transaction.