Hemas Holdings PLC’s (AA-(lka)/Stable) acquisition of a controlling stake in Sri Lanka’s leading school and office stationery manufacturer, Atlas Axillia (Private) Limited, will bolster Hemas’ defensive operating cash flows, Fitch Ratings said.
Fitch says it believe the acquisition has no immediate impact on Hemas’ rating because they expect the transaction to be largely funded by cash at hand without a material increase in debt. Fitch views this acquisition as in line with Hemas’ strategy of using its significant cash balance to expand its core businesses through M&A.
Atlas’ stationery business broadly fits into Hemas’ fast-moving consumer goods (FMCG) segment, which includes the manufacture and distribution of homecare and personal care products, and contributed to around 38%of Hemas’ EBITDA in the fiscal year to end March 31,2017.
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