U.S. buyout firm Advent International has agreed to purchase a controlling stake in Eureka Forbes Ltd, the Shapoorji Pallonji Group’s flagship sustainable consumer product and a household name in the vacuum and water purifier segments, to ??4,400 crores.
Eureka Forbes Ltd, a unit of Forbes and Co. Ltd, will be separated from the parent company and listed on ESB, the two companies said in a joint statement on Sunday.
“Upon listing on Eureka Forbes, Advent will purchase up to 72.56% of the then outstanding shares of the company on a fully diluted basis from the Shapoorji Pallonji group. Advent will then make an open offer in accordance with applicable regulations, ”the statement read.
The transaction will help Shapoorji Pallonji Group reduce its debt and focus on other activities. On the total debt of the group of ??20,000 crores, ??10,900 crore is the subject of a one-time restructuring plan under the regulations of the Reserve Bank of India’s Covid-19 relief framework, giving the 150-year-old conglomerate easier payment terms to meet the liabilities. contributions.
The SP group had proposed to raise ??10,332 crores through the monetization of these assets. It is also trying to sell other companies in the group, including Sterling and Wilson Solar, one of the largest providers of EPC (engineering, procurement and construction) solar solutions, and Afcons Infrastructure, a construction and engineering company.
Standard Chartered Bank advised SP Group on the Eureka Forbes transaction.
“Having provided innovative products and solutions to our growing customer base, we are now optimistic about the opportunity to unlock new growth and are delighted to embark on this new adventure with the promise of a better future” said Marzin R. Shroff, Managing Director and Managing Director of Eureka Forbes.
Eureka Forbes has a customer base of 20 million customers and a presence in 450 cities and towns in India.
The company sells its products through a multi-channel network, comprising direct sales, 20,000 points of sale and the e-commerce channel. In addition, it has a global footprint in 53 countries.
“We are delighted to partner with the Eureka Forbes leadership team and apply Advent’s value creation playbook to build one of India’s champions of consumer durables, which will continue to grow. to be known for its innovative products and first-rate customer service. Said Sahil Dalal, Managing Director, Advent India PE Advisors Pvt. Ltd.
Private equity firm Warburg Pincus and Swedish home appliance maker Electrolux were also in the race to acquire Eureka Forbes.
Advent has been investing in India since 2007 and has invested $ 2.2 billion in 16 companies in the consumer products, financial services, healthcare, industrial and technology sectors.
Eureka Forbes will be Advent’s fifth consumer acquisition in India. The other four are Crompton Greaves Consumer Electricals (a consumer electrical company), Dixcy Textiles (a men’s underwear brand), Enamor (a women’s underwear brand) and DFM Foods (a producer of packaged salty snacks).
Eureka Forbes is a leader in water purifiers and vacuum cleaners, as well as air purifiers and home security solutions. He had an annual turnover of about ??3,000 crore in 2020. It pioneered the concept of direct selling with its Eureka Forbes labeled vacuum cleaners in the country decades ago and has over 20 million customers in 53 countries.
The company blocked the asset in November 2019, as its offer to raise funds after pledging part of its massive holdings in Tata Sons was challenged by the Tatas and the case is still pending in the Supreme Court. .
With PTI entries