CAP explains merger with Portland Paints

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By Itohan Abara-Laserian
Lagos, Feb. 9, 2021 Chemicals and Allied Products (CAP) Plc has merged with Portland Paints Plc to benefit from the diversified revenue base, economies of scale and operational efficiencies.

Recall that CAP and Portland Paints – both subsidiaries of UAC of Nigeria – recently secured the approval of shareholders to merge both businesses.

The companies leveraged the Nigerian Stock Exchange’s (NSE) Facts Behind the Merger to engage stakeholders on Tuesday in Lagos and the merger was also commemorated with the NSE’s digital closing gong ceremony.

Speaking at the event, Mr David Wright, CAP Managing Director, said that the business combination would expand products offering as well as revenue base.

Wright said: “The rational for the merger is to expand our product offering, having Santex by Portland in the CAP range will increase our reach in the decorative medium segment.

“Our brand will also expand, Santex is locally owned; so we will have two local brands operating in different spaces of the decorative market; it will broaden our distributive capabilities.

“Once CAP and Portland come together, we will have 15 per cent of market share which will clearly place us as the market leader in the nation’s paint industry.

“The vision is to create a new Africa inspired by colours and being the market leader, will help us drive this forward as we plan to grow this business locally and internationally, organically or through acquisition, ” Wright said.

Also speaking, Portland Paints Plc Managing Director, Mrs Bolarin Okunowo, commended the NSE for its resilience in responding to the limitations occasioned by the COVID-19 pandemic and embracing virtual platforms that allow issuers to continue to engage with the market

Okunowo said that it was laudable that the NSE ensured listed companies continued to engage with the investing public in spite of the pandemic.

Mr Olumide Bolumole, Divisional Head, Listings Business of the NSE, said that the merger would afford CAP Plc a diversified revenue base and operational efficiency.

“This combination presents us a compelling opportunity and value for shareholders of CAP and also to achieve the company’s growth objectives.

“At the NSE, we will continue to provide a platform to support our clients in meeting their strategic business objectives and it is our delight to see listed companies take full advantage of the NSE’s products and services.

“I must, therefore, commend the Board and Management of CAP and Portland Paint for utilising this platform to communicate to their stakeholders and inform the market of their strategic and operational developments.

“We believe that this combination presents a compelling opportunity to create significant value for the shareholders of CAP Plc and also achieve the company’s strategic growth objectives,” Bolumole said.

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