Sri Lanka’s Hemas buys Atlas Axillia for Rs5.7bn

ECONOMYNEXT – Sri Lanka’s Hemas Holdings has bought acquired 75.1% of Atlas Axillia Co (Pvt) Ltd, a leading school and office brand, for Rs. 5.7 billion.

The existing shareholders of Atlas will retain a stake of 24.9% in the company, a stock exchange filing said.

Atlas Axillia Co., formerly known as Ceylon Pencil Company (Pvt) Ltd., will become the third largest business in the Hemas Group and will operate independently as a subsidiary of Hemas Holdings PLC.

Hemas said the entire proceeds from the April 2015 Rights issue of Rs. 4.1 billion to be invested in FMCG and Healthcare businesses have now been used with the acquisition of Atlas Axillia.  

A-Sec Capital (Pvt) Ltd, the investment banking affiliate of Asia Securities (Pvt) Ltd, acted as arranger and sole advisor to the seller on the deal.

During the first quarter of 2017, Hemas allocated Rs. 1.45 billion for the construction of the new Morison PLC pharmaceutical plant. 

Steven Enderby, Group Chief Executive Officer of Hemas Holdings, said Hemas Holdings is expanding its presence in the Sri Lankan consumer market by acquiring one of the most respected local brands with market leading positions for its notebooks, pens, pencils and colour products. 

“Today’s consumers seek out premium, innovative and design-oriented products and Atlas has demonstrated its ability to do this repeatedly, resulting in its unique position as the most loved school and office brand,” said Enderby.

“Consumer stationery is a new and exciting category for Hemas with significant potential and we will bring the best of our consumer-focussed mindset to deliver superior value to Atlas’ many customers across the island.”

Hemas said it aims to continue to drive Atlas’ track record of sales growth; and strengthen its market leading position, highly effective lean manufacturing and enviable dividend track record.





“The group will cross-fertilise brand and marketing insights between the business and its Home and Personal care portfolio as well as deliver route to market excellence through our two significant island wide sales and distribution networks. In addition, Hemas will look to reduce funding costs and enhance talent attraction and development at Atlas.”

Nirmal Madanayake, Managing Director of Atlas Axillia Co. said Atlas Axillia is growing and were were keen to take the organisation “to the next level”. 

“We went through a rigorous process to find the right partner, and we saw a great business and cultural fit with Hemas,” he said.

Atlas Axillia Co. was founded in 1959 by the Madanayake Family. 

The brand “Atlas” has been voted Sri Lanka’s most loved brand 2017.

The company is the market leader in school stationery and notebooks, pens, pencils and colour products, with products retailed in over 70,000 outlets across Sri Lanka. 

Atlas Axillia brands include “Atlas”, “Zebra X”, “Homerun” and “Innov8”. 

The Company employs 1,300 people and operates two production facilities in Peliyagoda and Kerawalapitiya.
(COLOMBO, January 19, 2018)

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