- 01 Jun 2022
- ICICIdirect Research
Ador Fontech amalgamates with Ador WeldingADORWELD - 915 Change: 63.10 (7.41 %)
News: The amalgamation (merger by absorption) of Ador Fontech Ltd with Ador Welding Ltd has happened. For every five equity shares of AWL, having a face value of Rs 10 each fully paid up, shall be issued for every 46 equity shares held in ADFL, having a face value of Rs 2 each fully paid up. Pursuant to this, the shareholders of Ador Fontech would have ~21.86% stake in Ador Welding. Post-merger, promoter group holding will be ~53.04% and public holding will be ~46.96%. The merger process is expected to be completed by March 31, 2023. The merger is subject to approvals from various entities.
Views: With PE of 12.4x, EV/Sales 1.06x and 7.7x of EV/EBITDA of Ador Fontech this merger will be EPS accretive given the acquired entity is debt free and consolidated EPS will be up by 15% to Rs 37.9. This will achieve Ador group’s vision of becoming a market leader and consolidate market position. Also provide diversified portfolio of products, economies of scale, optimal use of distribution network, sales force, human resources, manufacturing units, supply chain, research & training facilities.