Sheela Foam set to acquire Spanish firm Interplasp
The Board of Directors of Sheela Foam Ltd. approved the proposal to acquire Interplasp S.L., Spain. The acquisition will pave a way for Sheela Foam Ltd. to venture into Europe, which is the world’s largest polyurethane foam market.
The acquisition will enhance the company’s prospects as the target entity has ample growth opportunities in Morocco as well as other North African markets. Another major advantage of the acquisition is that Sheela Foam will now be able to negotiate the prices of raw materials for the consolidated quantity and have the option of procuring raw materials from India, Australia and Europe.
The company will also benefit significantly from the cross-fertilisation of technologies and product portfolios in all three geographies. The cost of acquisition stands at Euro 42 million. A 100 per cent subsidiary of the company is being established in Spain, and Sheela Foam will have to acquire 93.67 per cent stake in the target company.
Three key managers of Interplasp S.L. would continue to hold the balance 6.33 per cent of the shareholding, with the Sheela Foam having the right of first refusal of these shares.
Interplasp S.L. is a corporation which is primarily engaged in the manufacturing and marketing of slabstock polyurethane foam which is used for bedding, furniture and other applications in Spain and Portugal. It produces about 11,000 tons of polyurethane foam, annually. The company reported a turnover of Euro 31.6 million in 2018.
On Friday, the shares of Sheela Foam opened at Rs. 1,270.00 and hit a high and low of Rs. 1,279.00 and Rs. 1,260.00, respectively. The stock closed at Rs. 1,270.05, down 0.91 per cent.