Sundaram Multi Pap Updates on Acquisitions

Sundaram Multi Pap Ltd has announced that the Company has entered into Memorandum of Understanding (MoU) on May 14, 2007 with M/s. Sihora Paper Mills Ltd and M/s. Vidarbha Paper Mills Ltd for Merger / Amalgamation of these entities with the Company.

The Merger / Amalgamation of these entities on share swap basis is going to bring the following synergies for the Company:

1. The Company is into branded note book segment and in the business of conversion of paper into paper products.

2. Prior to this event, the Company was dependent for the paper procurement on outside printing and writing paper manufacturers.

3. Though the Company has credible export market presence, majority of the export markets prefer converters with captive manufacturing facilities.

4. Margins are poised to increase with captive manufacturing facilities.

5. Credible Asset base of the acquisition targets amounting to Rs 40 crores on realization value basis plus existing clientele and supply chain, which is getting added with the Company.

6. Though Equity base is going to increase with the Acquisitions through Amalgamation, equally the sales and profitability of the Company are also increasing, Book Value of the company is poised for increase with the increase in Networth upon Amalgamation.

Source : Equity Bulls

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