Private equity-backed Kurl-on, a brand known for its mattresses, has acquired Spring Air, a US-based manufacturer of bedding products, specialising in orthopaedic beds, for an enterprise value (EV) of Rs 70 crore.
The amalgamation was done using a share-swap deal, with the agreement being signed during the last week of March.
Sudhakar Pai, chairman and managing director at Kurl-on, told FE over a phone conversation that Spring Air has been in India for the last 10 years but the firm did not do too well.
“They wanted to expand and that is what led to the deal. This is a share-swap agreement and we signed the agreement during the last week of March,” Pai said.
With this acquisition, Spring Air and Englader brand of mattresses will now be under the Kurl-on umbrella.
Under the terms of the sale agreement, Spring Air will continue to manufacture its bedding products from its two manufacturing centres, complementing Kurl-on’s existing ten manufacturing facilities.
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Kurl-on, which has 10,000-plus dealers and 10 strategically located manufacturing facilities across Karnataka, Odisha, Madhya Pradesh, Uttarakhand and Gujarat, had received a private equity investment from Motilal Oswal Private Equity (MOPE) of `90 crore in 2015.
“Motilal Oswal Private Equity had acquired 10.11% in Kurl-on Enterprise. That investment came about three years ago and they still have two years for the exit. They can either exit through sale via strategic sale or through a public issue. That we will discuss in the next 18 months,” Pai said.
The acquisition of Spring Air will strengthen Kurl-on’s presence in the premium bedding segment, besides enabling them penetrate the fast growing demand in the hospitality sector and is in line with Kurl-on’s aggressive expansion strategy of both its product portfolio and retail presence, the firm said in a statement on Tuesday.
Spring Air’s product portfolio of niche, specialised products ranging across the premium and luxury category will now be available across Kurl-on’s over-1,300 exclusive franchise outlets and over-7,000 multi-brand outlet across the country, besides its 93 Kurl-on Home Komfort stores.
In addition, it will continue to be retailed at Spring Air’s 400 high end retail stores.
KPMG Corporate Finance was the transaction advisor for this deal.
Pai also stated in the release that while Kurl-on regularly invests in research and development (R&D), the firm is also open to exploring newer avenues for technological advancements, and it was here where it saw a fitment with Spring Air.
“The acquisition will contribute to Kurl-on crossing the `2,000 crore revenue mark in the next two years,” he said.
Kurl-on pointed out that at `10,000 crore, the mattress industry is projected to reach `14,000 crore by 2021, with a compounded annual growth rate (CAGR) of 9%.