The acquisition is in line with AMI Organics' strategy of expanding its speciality chemicals division to focus on niche products manufactured using advanced technology with low competition and high entry barriers.

This acquisition heralds AMI Organics' foray into the high entry barrier semiconductor industry. The company has already developed two electrolyte additives used as solid electrolyte interface in lithium-lon-batteries which are awaiting commercial orders from its customers.

The semiconductors are a high entry barrier industry with a long gestation period. The transaction gives AMI Organics entry into this complex industry with a strong brand such as BFC which has 25 years of zero-defect track record.

The purchase consideration will be discharged through a combination of cash consideration and issuance of securities of the company to the existing parties on a preferential basis.

The acquisition is expected to be completed within 6 months from the date of approval.

Naresh Patel, executive chairman & managing director, said, “This partnership provides us with the impetus to make a mark in the lucrative and high entry barrier semiconductor industry. Our synergies will help scale up BFC's niche product basket given that they are the only manufacturers in the country in their product category. With an exciting R&D pipeline, we are thrilled to work with the BFC team to scale-up their products at a higher volume. The acquisition is in line with our focus of expanding our presence in complex speciality chemicals industry and will complement our product basket of electronic chemicals.”

Rakesh Gupta, partner, Baba Fine Chemicals, said, “AMI Organics has a strong track record of developing products using advance technologies in higher volumes which makes them a perfect match for us. | believe our R&D strengths and AMI's operational excellence will help us grow manifold in the coming years.”

Surat-based Ami Organics is a R&D driven manufacturer of specialty chemicals with varied end usage, focussed on the development and manufacturing of advanced pharmaceutical intermediates (pharma intermediates) for regulated markets and generic active pharmaceutical ingredients (APIs) and New Chemical Entities (NCE) and key starting material for agrochemical and fine chemicals.

The company's consolidated net profit jumped 14.4% to Rs 22.28 crore in Q3 FY23 as against Rs 19.47 crore in Q3 FY22. Net sales rose 7.9% year on year to Rs 152.36 crore in Q3 FY23.

The scrip was down 0.41% to settle at Rs 1,059.80 on Friday, 21 April 2023.