Eastern Merchants PLC has acquired a 100% shareholding of Microcells Ltd., one of the premier rubber products manufacturers in Sri Lanka for Rs. 575 million.
The acquisition the biggest by Eastern Merchants PLC and was funded by a mix of equity and short-term debt.
Eastern Merchants PLC Deputy Chairman Harin de Silva said: “The acquisition is timely and in line with the company’s strategic plans to become a fully integrated rubber player.”
Eastern Merchants move also comes at a time when the Government is keen on boosting the rubber products exports sector. Last year the value-added rubber products sector earned a record $ 845 million last year.
Established in 1945, Eastern Merchants PLC is one of the major trading houses in Sri Lanka and a major exporter of natural rubber. Its portfolio also includes coconut fibre, desiccated coconut and
Sri Lankan spices.
“Given the deep experience with natural rubber, the well placed sourcing networks and strong supply chain, Eastern Merchants PLC is certain of its ability to realise the synergistic value of this acquisition,” the company’s Managing Director Channa de Silva said.
Founded in 1978 by entrepreneur Anil Wickremeratne, Microcells Ltd. manufactures and exports technical rubber matting and sheeting products to a global client base. The products of award-winning Microcells has applications in multiple sectors ranging from the agricultural to industrial sectors. A Board of Investment approved venture, Microcells has its factory and office complex in Piliyandala and employs over 150 personnel.
The Board of Eastern Merchants PLC also believes that through this acquisition the company will be able to reach new heights and fulfil its fullest potential while continuing to create shareholder value.
In FY18 as per interim accounts, Eastern Merchants Plc’s consolidated revenue was Rs. 1.4 billion, up 19% from the previous year. However the Group posted a post-tax loss of Rs. 10.9 million, down by 11% from a year earlier.
The Board of Directors of Eastern Merchants Plc comprises J.B.L. de Silva (Chairman), H.J. de Silva (Deputy Chairman), C.S.L. de Silva (Managing Director), S. Jayakody, N.K.L. Tilakaratna, C.I. Tilakaratna, F. Mushin and R. Pradeep.