Mumbai, India – Sheela Foam plans to buy Interplasp of Yecla, Spain for EUR 42m in cash, according to a filing with the Bombay Stock Market.
Sheela said the acquisition would give it 'a presence in Europe, the world's largest polyurethane foam market, and a huge potential to grow.'
In addition, it gives opportunities to 'negotiate raw materials prices for the consolidated quantity. The company will also gain access to raw material prices in India, Australia and Europe.'
Interplasp has capacity to produce 20 kT/year foam, according to Sheela. It is currently producing around 11kT/year. Its main markets are Spain and Portugal, but it also sells into North Africa.
The company's turnover has grown from EUR 15.9m in 2016 to EUR 31.6m in 2019.
Sheela, which will set up a wholly owned subsidiary in Spain to by 93.67% of Interplasp, expects the deal to close by the end of September. The current owners will keep the balance of the shares, and Sheela has the first refusal to buy them later.
This marks Sheela's second overseas expedition. In 2005 it purchased Australia's Joyce Foam. That business had profits of INR 95.9m on sales of INR 3.28bn ($ 47.7 m)in 2019.