(PTI) JK Cement on Thursday announced its foray into the paints business by acquiring 60 per cent stake in Rajasthan-based Acro Paints in a ₹153 crore deal.
Its wholly-owned subsidiary JK Paints and Coatings Ltd has entered into a share purchase agreement with Acro Paints Ltd and its shareholders to acquire a 60 per cent controlling stake in the company.
The "remaining 40 per cent shall be acquired over a period of 12 months as per the definitive agreement entered between the parties", a joint statement said.
Acro Paints is a manufacturer of architectural and high-performance paints and coatings.
"This acquisition is a step towards fast-tracking JK Cement's entry into the paints business, expanding its product offerings and potentially foray into new markets," it added.
Acro Paints has two manufacturing facilities, which are currently going through capacity expansion and are expected to be completed by Q2 FY24.
Post-expansion, it will have a capacity of 60,000 KL in decorative and textured paints and 6,700 KL in construction chemicals, it said.
"The acquisition of Acro Paints brings strong manufacturing capabilities and comprehensive product formulations, which will scale up to meet the business plan objectives for JK Paints & Coatings over the next few years," the statement said.
JK Cement Managing Director Raghavpat Singhania said this acquisition will create adjacencies that will act as a key driver for growth of the company.
JK Cement CEO Madhavkrishna Singhania said, "We have a focused launch plan to gradually deepen our presence in our strong markets over the next few years, and have identified specific geographic, product, and channel niches where we will dominate. We will leverage the strengths of both our brands as we expand our presence in the Paint Industry."
Acro's promoters Charanjeet Gaind and Ashok Gaind would continue for the next one year, which will provide an opportunity to gain from their experience, the statement said.
JK Cement has an installed grey cement capacity of 20 million tonnes per annum.
Recently, several companies have forayed into the paints business, which is largely dominated by a few players. According to reports, India is the world's third-largest consumer of paints by volume.
According to a report from Statista, a provider of market and consumer data, Asian Paints was the leading company in 2020, with a market share of about 39 per cent. In the organised sector, Asian Paints led the decorative market segment, while the industrial segment was led by Kansai Nerolac.
In 2019, JSW Group announced its entry into the paints business. Aditya Birla Group firm Grasim Industries is also entering the space by investing around ₹10,000 crore.