Doms Industries shares surge over 5% on agreement to buy Reynolds Pens

Shares of Doms Industries, the country's leading stationery and art materials maker, rose as much as 5.73% to hit an intraday high of ₹2,239.90 on the National Stock Exchange (NSE) on Thursday, June 11, after the company entered into an agreement to buy Reynolds Pens India Limited.

On the BSE, Doms Industries shares surged as much as 5.66% to hit an intraday high of ₹2,241.50.

Doms Industries post market hours on Wednesday said that it has entered into an asset purchase agreement (APA) with Reynolds Pens India Private Limited Sanford, L.P., Luxembourg Brands, Newell Europe, NWL Valence Services S.A.S. and NWL Switzerland for the acquisition of certain assets, relevant contracts, employees and intellectual property and associated identified liabilities relating to the manufacture and sale of pens, markers, highlighters and school supplies under the Reynolds brand.

After the completion of the deal company will grant Reynolds a royalty free license to use the ‘Reynolds’ brand as part of RPI’s corporate name and for ancillary purposes; and SLP will grant the Company, a royalty free license to use the ‘Paper Mate’ brand in order to fulfil the Company’s obligations under certain license agreements to be novated in favour of the Company; in each case on terms and conditions set out in detailed license agreements that will be signed on Completion.

The transaction is expected to strengthen the company's product portfolio and market presence in the writing instruments and school supplies segment, Doms Industries said in a regulatory filing.

The deal is valued at $3,700,000 and will be completed by July 1.

As of 12:13 pm, Doms Industries shares traded 6.38% higher at ₹2,253, outperforming the NIFTY 500 index which was down 0.3%.