Emami gets into haircare segment with Kesh King deal

By: | Updated: June 3, 2015 9:26 AM

Kesh King and the allied brands have a presence in 5.4 lakh outlets across the country with a turnover of around Rs 300 crore in FY15

Emami said Kesh King and the allied brands have established themselves as number one players in the category with presence in 5.4 lakh outlets across the country with a turnover of around Rs 300 crore in FY15.Emami said Kesh King and the allied brands have established themselves as number one players in the category with presence in 5.4 lakh outlets across the country with a turnover of around Rs 300 crore in FY15.

FMCG major Emami on Tuesday announced the acquisition of hair and scalp care brand Kesh King and its allied brands for Rs 1,651 crore.

“The acquisition marks Emami’s foray into the ayurvedic hair and scalp care segment, which is growing at a rapid pace,” the company said in a statement.

The Kolkata-based company has entered into an agreement with Sanjeev Juneja to acquire the hair and scalp care business under these brands. The acquisition process is expected to be completed in a month’s time.

“The transaction envisages transfer of the business as a going concern on a slump sale basis and 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 for a total consideration of Rs 1,651 crore,” Emami said.

The company said Kesh King and the allied brands have established themselves as number one players in the category with presence in 5.4 lakh outlets across the country with a turnover of around R300 crore in FY15.

Talking to FE, Emami’s director Harsha V Agarwal said the size of the domestic market for ayurvedic hair and scalp care goods is roughly Rs 800 crore at present. “Apart from the domestic market, we shall also explore international markets for the newly acquired brands. These brands have a good potential in Saarc countries and Middle East,” Agarwal said.

Asked about the impact of acquiring the brands on the company’s turnover, he said, “Prior to this acquisition, we were expecting the turnover growth for this fiscal at around 17-18% year-on-year. Now, the brands acquisition will give boost to our net sales.” The acquisition was part of the company’s aggressive growth and a perfect strategic fit for it, he added.

Emami posted close to a 22% jump on a year-on-year basis in its consolidated net sales at Rs 2,217.25 crore in FY15, while its net profit saw a more than 20% rise to Rs. 485.61 crore.

Emami has been acquiring brands domestically and internationally to wade into new product categories. Earlier this year, the company acquired a controlling stake in Australia-based Fravin along with its three subsidiaries for an undisclosed sum. Fravin manufactures natural and organic personal care products.

Last year it acquired sanitary napkin brand She Comfort from Royal Hygiene Care in an undisclosed all-cash deal to enter the Rs 2,100-crore women’s hygiene segment dominated by Procter & Gamble and Johnson & Johnson.
The company also acquired the Zandu brand in 2008 for Rs 700 crore.

Emami’s current oil portfolio includes Navratna Cool Oil and Emami 7 Oil in One Damage Control Hair Oil.

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