Having made eight successful acquisitions in recent times, including that of Darling Holdings hair care business in Africa earlier this week, Godrej Industries chairman Adi Godrej says his company will continue to scout for more acquisitions in the coming days. Godrej shares his plans with FE’s Timsy Jaipuria.
What is the deal size of your acquisition of Darling Holdings and is it an all-cash deal?
Darling Group is one of the largest hair care companies in Africa and the deal size is quite substantial. Yes it is an all-cash deal where we have acquired 51% in the company which will be done in three phases. In next 3-5 years we will take over the operations of Darling in all 14 countries.
How did you fund the acquisition?
As mentioned, it is an all-cash deal, which is funded partly through internal accruals and partly though offshore borrowings. Since we have a confidentiality agreement, I can?t talk more about the financials.
How much will this acquisition boost your revenues?
It?s a very large acquisition. It will definitely boost our revenues substantially. But I cannot disclose the numbers.
Will you introduce the product portfolio of Darling Holdings in India?
No, we will not. Because they excel in hair extension business which is negligible in India.
It is only in Africa that this business is pegged at over $1 billion. But, yes, we do see this as an opportunity to take some of our products through Darling Holdings in countries where we are not present.
What are the plans for more acquisitions in the next few months?
We do not earmark any amount for acquisitions. This is our eighth acquisition and we are constantly looking for opportunities. As and when we see an option coming our way, we will borrow or raise funds for that acquisition.
Any particular geography where you are planning to enter?
We have a 3-by-3 strategy in place according to which we see huge acquisition opportunities in Asia, South-America and Africa in personal care, personal wash and home care.
How much does Africa contribute to your revenues and what are your growth targets in Africa?
Currently Africa contributes to 6% to our revenues and with acquisitions we see it rising substantially.
What are your overall growth plans for the next five-six years?
We have a 10 by10 strategy at Godrej where we expect to grow 10 times in next 10 years, which will see a compounded annual growth of 27% every year.
How is your property business doing?
Our property business has contributed a lot to our growth this year. We are also working on making launches and have a strong presence across India. Apart from this, we have also entered a new property re-development business. This is on the back of good re-development business that we see in Mumbai.
Do you plan to take this property re-development business beyond Mumbai?
As of now, we see its potential in Mumbai only and we have no plans to take it beyond. But I will say I do not want to make any forward looking statements.
With commodity prices increasing, do you plan any price hike?
Our margins are not getting hurt by the commodity price hike. Whenever there has been such a case, we have hiked the prices of our products. As and when a need arises for hiking prices, we will look into it. I cannot predict it right now.