Emami acquires Kesh King’s hair and scalp care business
Mumbai: Emami Ltd on Tuesday said that it has acquired the hair and scalp care business of Kesh King from Himachal Pradesh-based SBS Biotech Pvt. Ltd for Rs.1,651 crore through a slump sale. Such a sale involves sale of the whole business for an amount without assigning values to individual assets and liabilities.
Emami is new to the Ayurvedic hair and scalp care segment. As per deal, promoter of SBS Biotech Sanjeev Juneja’s brand portfolio of Ayurvedic medicinal oil, herbal shampoo and conditioner and Ayurvedic capsules along with its formulations, assets, rights and liabilities including working capital will be transferred to Emami, a company statement said.
Kesh King and allied brands had a revenue of Rs.300 crore in 2014-15 and have been growing at an average of 68% a year for the last three years, said Harsh Agarwal, director, Emami. He did not disclose the profits made by the privately held company but said that their margins were better than Emami’s.
Emami Ltd had reported a 20.7% year-on-year rise in net profit to Rs.486 crore for 2014-15 over a a 21.8% rise in revenue to Rs.2,217 crore.
In January, Emami had acquired 66.67% stake in Australia-based Fravin Pty Ltd. The deal amount remained undisclosed.
“We will continue to look for more acquisitions in healthcare and personal sector in India and abroad,” said Agarwal, adding that the current acquisition will be funded through a mix of internal funding and debt. “It will be EPS (earnings per share) accreative in the third year,” he said.
Emami is now in a dominant position in the Ayurvedic and herbal space. In the Ayurvedic hair oil segment, Kesh King is the market leader and this will help Emami consolidate its position, said Abneesh Roy, associate director, institutional equities, research, Edelweiss Securities Ltd.
At 12.04pm, Emami Ltd was trading at Rs.1,070 on BSE, down 5.5% from its previous close, while India’s benchmark index Sensex fell 1.22% to 27,509.85 points.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.