With Mirotone buy, JAT sees Sri Lankan multinational company status

• Reveals to capital market participants significant upside post-Rs. 800 m acquisition
• Already present in four markets, JAT via Kiwi-based Mirotone gets foothold in Australia
• Eyes global presence including India, Southeast Asia, Europe and North/South America

Founder and Managing Director Aelian Gunawardene

Chief Executive Officer Nishal Ferdinando

New Zealand High Commissioner to Sri Lanka and Maldives David Pine

JAT Holdings PLC this week declared that its Rs. 800 million worth acquisition of globally respected coatings brand Mirotone (NZ) Ltd., holds significant upside for higher earnings growth in tandem with greater market access.

Established in 1935, Mirotone (NZ) Ltd., is the market leader in industrial wood coatings across New Zealand. The total transaction, comprising the purchase consideration and committed reinvestment for growth, represents a strategic investment exceeding 4 million AUD (about Rs. 800.7 million).

This includes an acquisition value of 2.5 million AUD for 100% ownership of Mirotone (NZ) Ltd., and an additional 1.5 million AUD for working capital infusion, modernisation of manufacturing operations in New Zealand, and the re-launch of Mirotone’s legacy brand in the Australian market.

Speaking at a forum of capital market participants with New Zealand High Commissioner to Sri Lanka and Maldives David Pine as the Chief Guest, JAT Holdings Founder and Managing Director Aelian Gunawardene described the milestone as a defining chapter in JAT’s global journey: “The acquisition of Mirotone gives JAT not only a powerful brand but also a passport to the world, with immediate reach across Australia and future access to markets in Europe and the Americas.”

JAT is on its way to being a true Sri Lankan multinational company, he added.

JAT Holdings Chief Executive Officer Nishal Ferdinando said the acquisition gives JAT access to the giant Australia market, where Mirotone will be relaunched shortly. This will expand JAT’s global footprint, which currently includes Bangladesh, the Maldives, and Kenya.

Ferdinando said JAT via Mirotone is also exploring prospects in India, Southeast Asia, Europe, and North/South America.

According to him, JAT’s consolidated revenue, which is Rs. 12 billion, has the potential to grow by 106% and Group’s bottom line, which is now at Rs. 1.8 billion, by 71% by 2027/28 FY. At present, JAT’s international revenue is 30% and is projected to grow to 50%, and revenue from JAT’s own brands will be 70% up from 40%.

Specifically for Mirotone, JAT expects its turnover to grow to NZ$ 23 million by 27/28 FY, from NZ$ 8 million at present. This is via the relaunch in Australia, product innovation, expanding into the architectural wood coating retail sector, exporting into neighbouring territories such as Fiji, and organic growth. Mirotone’s gross profit, which is at 42%, is projected to grow by 59% via centralised manufacturing and sourcing, as well as backward vertical integration through Sri Lanka’s acrylic binder plant and Bangladesh’s Alkyd Resin Plant. After-tax profit is projected to grow to 16% from 3% at present via synergies such as centralised research and development (R&D) and support services, as well as reduced cost of capital.

At present, JAT enjoys 58% market share in the Sri Lankan retail sector and has a strong presence in the South Asia region in addition to state-of-the-art R&D and innovation prowess, backward integration, and highest conversion percentage of solvent to water based.

Claiming it has the best product quality tailor-made for the region, JAT also has professional expertise in emerging markets.

Mirotone, on the other hand, with a 90-year brand legacy, has a loyal industrial customer base, with market leader status in New Zealand for industrial wood coatings. It also has longstanding professional expertise in developed markets and top-of-the-mind brand recall in Australia.