Kolkata-based fast moving consumer goods company Emami Limited has acquired prickly heat and cool talcum powder brand Dermicool from Reckitt Benckiser Healthcare (India) Private Limited for Rs 432 crore, excluding taxes and duties, the company said in a regulatory filing on Friday.
The acquisition is funded through internal accruals and is subject to customary closing conditions, it said.
To be sure, Emami already sells Navratna Cool Talc in the country—the move will further strengthen the company’s position in the prickly heat and cool talcum powder category. The company’s Navratna brand is driven by large celebrity endorsements with availability across more than 4.5 million retail stores. The brand leads the cool oil segment and is the second largest player in cool talc prickly heat powder segment. Dermicool commands a 20% market share in the high growth and low penetrated talcum powder category, the company said.
Combined with Emami’s Navratna Cool Talc, Emami will become leader in this niche category which would also help realise synergetic benefits and optimize costs, the company added.
Harsha V Agarwal, Director, Emami Limited called the brand a “strategic fit” within Emami’s portfolio.
“It will strengthen our presence to make us number one in the prickly heat powder and cool talc category. With increasing global warming and soaring summer temperatures, such problem solution niche products are poised for strong growth in future,” Agarwal said.
Avendus Capital was the exclusive financial advisor to Reckitt on this transaction.
The move follows Emami’s recent investments in direct-to-consumer brands.
Earlier this month—the company acquired a 19% equity stake in nutrition products maker Tru Native F&B Pvt Ltd for an undisclosed amount. Last year the company increased its stake in Helios Lifestyle—a direct-to-consumer start-up that sells male grooming products under The Man Company brand.
Analysts endorsed Emami’s strategy to acquire more brands in its core area apart from stake earlier in direct-to-consumer brands.
Emami, as one of its core business strategies, has always been open to growth through inorganic route. The company considers acquisitions that not only add value and have synergy with the current line of businesses, but also offer opportunities for the organization to be present in categories that have high growth potential, the company said. Brands such as Zandu, Kesh King and German brand Creme 21 are some of the businesses acquired by the company over the years.
Emami’s sells brands such as Boroplus, Navratna, Zandu, Fair & Handsome, Kesh King, among others in over 900,000 retail outlets directly. Emami also exports to over 60 countries and has with a presence in Russia, CIS, GCC, SAARC and African countries. It has subsidiaries in UAE, Bangladesh, Russia and Sri Lanka.
