Wipro Consumer Care & Lighting has signed an agreement with UK?s Lornamead group to acquire the Yardley business in Asia, Middle East, Australasia and certain African markets for $45.5 million (about Rs 214 crore). Lornam-ead, founded by London-settled Jatanias of Indian origin, would retain the Yardley business in Europe and America.
The transaction would be completed by mid-December 2009. The revenue run-rate of the business for FY10 is $24 million (about Rs 113 crore).
This is the second largest acquisition by Wipro Consumer Care after Unza, which it acquired for $246 million (about Rs 1,156 crore) in 2007. Unza then had revenues of Rs 683.3 crore. That move had signalled Wipro?s big ambitions in the global fast moving consumer goods space, to come out of the shadow of its IT business.
?This acquisition fits into our strategy of increasing sales and brand presence in the Middle East,? said Vineet Agrawal, president, Wipro Consumer Care & Lighting. ?The revenue from the Yardley acquisition will start flowing in from the middle of December, when the deal is expected to close. This acquisition will also help Wipro Consumer double its annual revenue from the Middle East to $30 million (about Rs 141 crore),? Agrawal said.
The acquisition is likely to increase Wipro Consumer?s operating margin to 13% from the current 12%, Agrawal said.
Nagender Arya, regional director (East Asia, Middle East & Africa), Wipro Consumer Care & Lighting, said, ?Yardley complements our portfolio comprising brands such as Santoor and Enchanters.? Santoor, the flagship brand of Wipro Consumer, is among the top five soap brands in the country.
The Lornamead group, which focuses on buying and developing heritage brands, acquired Yardley from Procter & Gamble in September 2005. Before that, Yardley, famed for its lavender soap and talcum powder, was available in India through Bond Street Cosmetics, a licensee.Lornamead CEO Mike Jatania, with roots in Rawal, Gujarat, is amongst the richest Asian businessmen in Britain. His family migrated from Kampala, Uganda, in 1965 and reached Britain in 1969.The global turnover of Lornamead is estimated at $650 million. It has a range of personal care products in its portfolio?including haircare brands Brisk, Vosene and Aqua Net, skincare brands Amplex and Handsan, oralcare products Brilliant and Goldspot?besides homecare brand Stergene.
Wipro Consumer recorded revenues of Rs 587 crore , up 11%, for the quarter ended September 30, 2009, accounting for 8% of total revenue. With this acquisition, there may be a marginal increase in our contribution reaching about 8.5% to 9%, said Agrawal.