United Phosphorus or UPL as it is known today is among the top three gainers on the BSE currently. The stock price surged almost 8% to Rs.593; it has come off the intra day high point but remains at Rs.583 levels, up some 6%.
The stock price is reacting to its announcement of Friday that it will be acquiring 100% stake in Arysta LifeScience Inc. and its subsidiaries (collectively 'Arysta'), a global provider of innovative crop protection solutions, including BioSolutions and Seed Treatment. This deal was clichéd for at approximately US$4.2 billion in cash consideration.
To make this payment, UPL will be taking on a debt of around $3 billion and balance is to be funded by investments of $600 million each by Abu Dhabi Investment Authority and private equity firm TPG.
UPL’s total debt at end of FY18, as such was pretty big at over Rs.6500 crore.
The company’s management said it expects synergy benefits to be around $100 million in the first year and $200 million in the second once it closes the deal.