Emami Ltd, the flagship firm of business conglomerate Emami Group, has signed an agreement with entrepreneur Sanjeev Juneja to acquire his hair and scalp care business under the brand Kesh King at an enterprise value of Rs 1,651 crore ($259.3 million), according to a stock market disclosure.
The deal is expected to close within a month and will be funded through a mix of surplus funds, short-term and long-term debt.
The acquisition will include brand portfolio of ayurvedic medicinal oil, herbal shampoo and conditioner and ayurvedic capsules along with its respective formulations and all related assets, rights and liabilities including working capital.
Kesh King is owned by Juneja, the promoter of SBS Biotech Ltd. Himachal Pradesh-based SBS Biotech was founded in 1997 and manufactures pharmaceutical and ayurvedic products like tablets, capsules, injections, dry syrups, ointments and herbal medicines.
"The acquisition is part of our aggressive growth strategy and marks our foray into the ayurvedic hair and scalp care segment. We plan to leverage the target business with our existing strength to make our presence stronger and deeper. The transaction is a perfect strategic fit for Emami,” said Harsha V Agarwal, director, Emami.
Juneja introduced Kesh King brand in 2009 and claims that it is currently present in 5.4 lakh outlets in the country and in FY15 it clocked a turnover of around Rs 300 crore.
Established in 1974, Emami is one of the leading personal and healthcare businesses in the country. The firm has more than 250 products based on ayurvedic formulations and operates in over 63 countries including GCC, Europe, Africa, CIS countries and SAARC.
Its brand portfolio includes BoroPlus, Navratna, Fair and Handsome, Zandu Balm, Mentho Plus Balm and Fast Relief and oil portfolio such as Navratna Cool Oil and Emami 7 Oil in One Damage Control Hair Oil.
This is the second acquisition by Emami this year. In February, the company acquired Australian personal care products firm Fravin Pty Ltd.
Last June, it acquired sanitary napkin brand She Comfort from Mumbai-based Royal Hygiene Care Pvt Ltd for an undisclosed amount.
Emami's scrip closed at Rs 1,066.15 each, down 5.80 per cent on BSE in a weak Mumbai market on Tuesday.
Khaitan & Co acted as legal advisor for Emami on the latest transaction.