Shares of Snowman Logistics surged over 7 percent on Monday after Adani Group acquired a majority stake in the company for Rs 296 crore from Gateway Distriparks Ltd.
At 10:10 am, the shares were trading 1.99 percent higher at Rs 43.50 per share on the BSE. The stock price rallied 7.38 percent to touch high of Rs 45.80 apiece intraday.
Shares of Adani Ports & SEZ Ltd also gained 2 percent intraday.
On Friday, Adani Logistics Ltd, a wholly-owned subsidiary of Adani Ports and SEZ, signed definitive agreements to acquire 40.25 percent stake in Snowman Logistics Ltd from Gateway Distriparks Ltd to foray into cold chain logistics.
Snowman is a market leader in cold chain logistics with over 30 percent of capacity amongst integrated organized cold chain service providers in India.
The acquisition gives Adani Logistics platform to double its capacity in the next five years. The buyout is in line with the firm's strategy to move from the port gate to the customer gate.
"The purchase price of Rs 44 per share represents a 3.2 percent premium to the market price of December 27, 2019, and a 12 percent premium to 60-day average," it said.
Global brokerage CLSA forecasts this strategic asset to deliver 14 percent growth in port EBITDA over FY19-21CL for Adani Ports & SEZ.
"It adds 16 percent to Adani Logistics revenues and 14 percent to Ebitda. Adani Ports & SEZ acquired Snowman at an EV/Ebitda of 11.8x FY21E, a premium to its own, due to high growth potential led by low organised sector (16 percent) penetration," CLSA said in a note.
The brokerage expects that funding is not a problem for Adani Ports as its post-acquisition leverage shall rise 1.8 percent in FY21CL.
"In terms of earnings, Snowman M&A adds Adani Ports' consolidated Ebitda by 0.7 percent in FY21CL," CLSA added.
The brokerage maintains a 'Buy' call on Adani Ports & SEZ with a Target price of Rs 485.