Ethos Capital, HDSG & Associates and Jindagi Live Consulting were advisors to Blue Heaven Cosmetics.
Samara Capital, a mid-market buy-out private equity fund, is set to acquire 50% stake in Blue Heaven Cosmetics for an undisclosed amount, according to a release issued on behalf of Samara on Monday evening.
Blue Heaven Cosmetics is a family-run company founded by Charanjit Singh and Gurnam Singh, which, along with its group entities, manufactures and markets a range of cosmetic products under the brand “Blue Heaven”. The product portfolio includes a range of makeup products such as kajal, eye liner, mascara; lip stick, lip gloss, nail enamel, sindoor, foundation, compact and others.
According to the release, Blue Heaven, along with its group entities, generates sales of over Rs160 crore and has been growing at over 15% per annum. The firm plans to use the funds for investment into marketing and distribution and consolidation of group entities, and to take advantage of the management talent brought in by Samara to take the brand to the next level of growth.
Gautam Gode, co-founder and managing director at Samara Capital told FE over a phone conversation that this is a sector that the firm has been looking at for a while and is of great interest to all private equity funds. “The difference here is that this is a mass market brand. A lot of the action and activity in the cosmetics space has happened at the higher end. This brand caters to tier-2 and tier-3 cities or the suburbs of metros. It has a very different client set and that is where the growth is coming from. In this space, there is really no other brand that can challenge it,” Gode said.
He also indicated that the firm has been profitable. With the acquisition, Samara is likely to get three Board seats in the company, he indicated.
One of the positives about the firm, according to Gode, is the fact that the firm is facing lesser competition. “The only competition for Blue Heaven has been the unorganised sector or Chinese imports. That kind of competition has taken a bit of a backseat, firstly because of demonetisation and secondly because of GST. That has also helped the future outlook for this kind of brand quite a bit,” he said.
Blue Heaven is predominantly present in the northern and western parts of India and a little bit in the south. Sales are done predominantly through the traditional channels while online is very small, Gode indicated. “That’s what we expect to focus on and that’s our role in the partnership. They need to look at new channels like ecommerce. We will be adding value in that part of the business,” he said.
Charanjit Singh, promoter and director at Blue Heaven Cosmetics stated the firm is seeing a strong demand for its products and felt a need to institutionalise the company and its operations. “We share a common vision with Samara and are excited to partner with them,” Singh stated in the release. Ethos Capital, HDSG & Associates and Jindagi Live Consulting were advisors to Blue Heaven Cosmetics.