New Delhi: Dabur India Ltd will acquire 51% stake in hair care company Sesa Care Pvt. Ltd has an enterprise value of ₹31.5-32.5 billion.
Dabur will pay Rs 12.6 billion to True North, a private equity fund and existing owner of the hair care company, to acquire 51% of Sesa’s total paid-up cumulative redeemable preference shares (CRPS). The FMCG major will also assume Sesa’s Rs 289-crore debt, which will be backed by Dabur’s corporate guarantee.
As part of the merger, Dabur shares will be issued in exchange for Sesa Care shares and the remaining 49% CRPS.
Daboul said in a regulatory filing that the merger is expected to close within 15 to 18 months, subject to approval. Ambit Private Ltd was the advisor on the transaction.
This is Dabur’s second acquisition in the past two years. In 2022, it acquired a 51% stake in spice maker Badshah Masala for Rs 587.52 million.
Wednesday’s announcement will help Dabur expand its presence in the ₹900-crore Ayurvedic hair oil market.
“The proposed merger will result in significant revenue and cost synergies. Dabur’s extensive distribution network, category expertise and access to key international markets will enable Dabur to grow its brand and expand its footprint. ,” the company said in an exchange filing.
Dabur sells hair oils under the brands Dabur Amla, Vatika and Dabur Almond. The move further strengthens the company’s position in the value-added hair oil market and puts it up against competitors such as Hindustan Unilever’s Indureka, Emami’s Kesh King and Marico’s Parachute.
In 2015, Kolkata-based consumer goods company Emami acquired Ayurvedic hair and scalp care brand Kesh King for Rs 1,651 crore.
In addition to shampoos and conditioners, Sesa Care also sells its flagship product, Sesa Ayurvedic Oil. In 2018, True North acquired a majority stake in Ban Labs Pst Ltd., a Rajkot-based manufacturer of Sesa hair oil.
Also read | Local demand is finally starting to pick up steam. FMCG companies take advantage of strategic moves
Darbur on Wednesday reported a 17.5% year-on-year decline in consolidated net profit (attributable to owners of the holding company) to Rs 425 million for the quarter ended September. Consolidated operating revenue decreased by 5.5% to Rs.3,028.59 billion.
In FY24, Sesa Care reported a revenue of Rs 133 million. According to Dabur’s regulatory filings, the company operates a manufacturing facility in Himachal Pradesh and has an 11% share of the country’s hair oil market.
Sesa also has a wholly owned subsidiary in Bangladesh under Sesa Care Bangladesh Pvt. Once the merger is completed, the business will become a wholly owned subsidiary of Dabur.
“This merger is in line with our long-term vision to consolidate our portfolio and take advantage of new growth opportunities. By integrating our knowledge, access to key international markets, we aim to grow the Sesa brand and deliver higher value to our stakeholders in addition to revenue and cost synergies.”Mohit Malhotra The CEO said this:
Abhinav Dhar, executive director and head of the company’s corporate strategy group, said Dabur continues to actively explore further targets in both traditional and new-age sectors.
Also read: Dabur’s September quarter update throws cold water on market expectations
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