Shapoorji Pallonji Group sells Eureka Forbes to Advent in Rs 4,400-crore deal

By: |
September 20, 2021 5:45 AM

Eureka Forbes, a wholly-owned subsidiary of SP Group firm Forbes & Company, has presence in water purification, vacuum cleaning and health and safety solutions space.

The sale will help the 156-year-old Shapoorji Pallonji Group pare its debt, which currently stands at Rs 10,900 crore, as it intends to focus on its core businesses of construction and real estate.The sale will help the 156-year-old Shapoorji Pallonji Group pare its debt, which currently stands at Rs 10,900 crore, as it intends to focus on its core businesses of construction and real estate.

The Shapoorji Pallonji Group on Sunday announced the sale of its consumer durables business under the Eureka Forbes label to American private equity fund Advent International. Under a Rs 4,400-crore deal, the PE firm will acquire a controlling stake of 72.56% in the business, which will come under a standalone company.

The sale will help the 156-year-old Shapoorji Pallonji Group pare its debt, which currently stands at Rs 10,900 crore, as it intends to focus on its core businesses of construction and real estate.

According to the contours of the deal, Eureka Forbes will be demerged into a standalone company and then will be listed on the BSE.

Upon its listing, Advent will acquire the majority stake from SP Group, following which the PE firm will make an open offer as per the Sebi takeover code.

The valuation of Rs 4,400 crore for a 72.56% stake is at an enterprise level and subject to closing adjustments, the SP Group said.

Eureka Forbes, a wholly-owned subsidiary of SP Group firm Forbes & Company, has presence in water purification, vacuum cleaning and health and safety solutions space.

“We are pleased that Eureka Forbes, a jewel in the SP Group has found a new home with Advent while at the same time unlocking value for shareholders. This transaction also reflects our stated objective and strategy of significant de-leveraging and focusing on our core competencies and businesses,” Jai Mavani, executive director at Shapoorji Pallonji and Company Pvt Ltd.

Standard Chartered Bank is the financial adviser, Desai & Diwanji is the legal counsel, Katalyst Advisors the structuring and tax advisor, Boston Consulting Group is the commercial due diligence and strategic advisor and KPMG India is the financial advisors to SP Group.

For Advent, which has been investing in India since 2007, Eureka Forbes will be its fifth buyout in the consumer sector. The PE firm had earlier made four consumer investments, including Crompton Greaves Consumer Electricals, Dixcy Textiles, Enamor and DFM Foods.

Over the past 14 years, Advent has invested or committed $2.2 billion in 16 companies with headquarters or operations in India across sectors such as consumer products, financial services, healthcare, industrial and technology.

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