Mumbai: Marico Ltd said on Wednesday it had acquired the personal care brands of Paras Pharmaceuticals Ltd from British consumer goods firm Reckitt Benckiser Group Plc. This is Marico’s largest acquisition till date, and its 10th buyout since 2006.
The transaction is expected to be completed by the end of the second quarter, according to a statement by Reckitt Benckiser.
Marico, the makers of brands such as Parachute and Saffola, did not disclose financial details of the transaction, but said the Paras brands—Set Wet and Zatak deodorants and leave-on conditioner Livon—would add substantially to their business.
Marico said it will fund the purchase through a mix of internal accruals, equity and debt. Morgan Stanley India Co. Pvt. Ltd advised Reckitt Benckiser on the transaction.
“The acquired business has a revenue of Rs 150 crore. We have aggressive growth plans for this business,” said Saugata Gupta, CEO, consumer products business at Marico, adding that the the categories fill a critical gap in its portfolio—of addressing youth brands in the male grooming and post-wash haircare segments.
The company will continue to look for inorganic growth to expand its presence in South-East Asia, according to Gupta.
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“These are high-growth emerging categories growing at 30-40% and will see a lot more competition and action taking place in the future,” said Ritesh Chandra, executive director and head (consumer) at Avendus Capital Pvt. Ltd.
In December 2010, Reckitt Benckiser had acquired Gujarat-based Paras Pharmaceuticals’ over-the-counter (OTC) and personal care businesses for about Rs 3,260 crore in a deal paying seven times revenue. Reckitt Benckiser has retained the OTC brands that include Moov, DermiCool, D’Cold and Krack. The company had previously said it wanted to focus on the Indian company’s healthcare business.
“Marico could be paying around Rs 450-500 crore (approximately $100 million) to buy the assets,” according to VCCircle, a portal dedicated to mergers and acquisitions in India.
Marico had posted a 21% increase in net profit at Rs 84 crore for the third quarter ended December. Its revenue rose 29% to Rs 1,058 crore during the same period. The company’s stock rose 2.04% to Rs 165.20 on BSE on Wednesday. The benchmark Sensex rose 1.98%.
Reuters contributed to this story.