Cosmo Films (CFL) went on to complete the acquisition of US-based GBC Commercial Print Finishing, the thermal lamination division of ACCO Brands Inc for $17.1 million, which was announced in January ‘09. The company will be spending around $5 million more on its turnaround.
GBC has three plants in the US, Netherlands and Korea with a combined laminated film capacity of 15,000 tonnes per annum. With this acquisition, CFL’s laminated film capacity rises to 36,500 tpa and it emerges as the global leader in thermal laminates.
GBC’s turnover for ‘08 was around $100 million, however, without any operating profit. CFL will have to rationalise the manufacturing and cut down overheads to turn it around. The company currently exports from India identical products in same geographies as GBC, hence the acquisition will give it better synergies.
CFL, which is carrying around Rs 260 crore of debt, will raise another Rs 70 crore of debt to fund the acquisition. The company, which has recently added 35,000 tpa of BOPP film capacity, taking it to 91000 tpa, has plans to add another 35,000 tpa by early next year. This envisages an investment of Rs 120 crore. For the year ended March ‘09, CFL reported a consolidated net profit of Rs 74 crore on a turnover of Rs 633 crore. However, the net profit included a write-back on change in depreciation method, of Rs 45 crore. Excluding the tax impact on this extraordinary item, the net profit would be around 5% higher on year-on-year basis. At the current market price of Rs 95.80, the scrip is currently trading at 4.5 times its consolidated earnings for FY09.
GBC has three plants in the US, Netherlands and Korea with a combined laminated film capacity of 15,000 tonnes per annum. With this acquisition, CFL’s laminated film capacity rises to 36,500 tpa and it emerges as the global leader in thermal laminates.
GBC’s turnover for ‘08 was around $100 million, however, without any operating profit. CFL will have to rationalise the manufacturing and cut down overheads to turn it around. The company currently exports from India identical products in same geographies as GBC, hence the acquisition will give it better synergies.
CFL, which is carrying around Rs 260 crore of debt, will raise another Rs 70 crore of debt to fund the acquisition. The company, which has recently added 35,000 tpa of BOPP film capacity, taking it to 91000 tpa, has plans to add another 35,000 tpa by early next year. This envisages an investment of Rs 120 crore. For the year ended March ‘09, CFL reported a consolidated net profit of Rs 74 crore on a turnover of Rs 633 crore. However, the net profit included a write-back on change in depreciation method, of Rs 45 crore. Excluding the tax impact on this extraordinary item, the net profit would be around 5% higher on year-on-year basis. At the current market price of Rs 95.80, the scrip is currently trading at 4.5 times its consolidated earnings for FY09.
No comments:
Post a Comment