Mercer to acquire Santanol

Canada-based forest products company Mercer International has confirmed it will acquire privately owned Indian sandalwood producer Santanol for an unspecified sum.

Canning Vale-based Santanol owns about 2,500 hectares of plantations in Western Australia and Queensland, a processing and extraction plant in Kununurra, and a sandalwood oil distillery in Perth.

Nasdaq-listed Mercer said the acquisition was subject to customary conditions, including regulatory approval, and was expected to be completed by the third quarter of 2018.

KKR became the majority shareholder of Santanol in 2013, after it funded a $70 million acquisition of plantations owned by agribusiness company Elders.

Santanol was put up for sale three months ago by KKR, after a falling out between the global investment firm and a group of minority shareholders, including Tony Jack and Bob Bunning, led to Supreme Court action being commenced last year.

Indian sandalwood oil extract is used for fragrances and cosmetics, and the harvested wood is used for religious and decorative purposes in Asia.

Grant Samuel and Gilbert + Tobin were KKR’s advisers.