True North picks up 75% stake in Sesa Hair Oil maker
Private equity firm True North has acquired a majority stake in Ban Labs for about ₹700 crore.
Mumbai: Private equity firm True North has acquired a 75% stake in Ban Labs Pvt. Ltd, the owner of the Sesa Hair Oil brand, for about ₹700 crore, said a person familiar with the matter.
The remaining stake will be retained by the founder D.K. Patel, the person added, requesting anonymity.
True North plans to expand the business of Ban Labs, which also makes Dr’s Care detergent and dishwash liquid and Charm & Glow skincare products.
“The idea is to build on what the promoter has done, not craft out another track. That is why the promoter (Mukesh Ukani) partnered with us. The idea is to build on what’s already created and take it to the next level,” Ashish Bhargava, partner at True North, said in a phone interview.
Bhargava plans to do so by professionalizing the company, bringing in fresh blood, introducing next generation marketing practices, and expanding sales and distribution.
Besides leveraging the brand, the acquisition could also be part of True North’s larger strategy of acquiring more companies or brands in the consumer sector, said Bhargava. “This is one of our first product deals. There are very few brands available at this size and scale. If good brands are available we would like to participate and acquire them,” he said.
Mint had reported in June that True North is in advanced talks to acquire a large minority stake in the Sesa brand for as much as ₹400 crore.
True North, started as India Value Fund in 1999, has assets under management of more than $2 billion. It raised its latest fund of $600 million last month, to be invested in mid-sized Indian businesses. Its past investments include cab-hailing app Meru, Magna Fincorp, KIMS Hospitals and VKL Spices.
Bhargava expects the acquisition to be valuable because of Sesa’s strong brand presence and rising demand for specialized hair oils.
“The promoter created a good brand over 25-30 years, and the brand has made a space for itself. Consumers are looking for hair oil that is more potent and can give them benefits quickly. That is why some of these specialist hair oils seem to be doing well,” he said.
Ban Labs currently has a revenue of about ₹240 crore, growing at the sectoral rate of 5% annually, according to Bhargava.
Bhargava himself comes from the packaged consumer goods industry, having been head of marketing for Marico Ltd, which clocked revenue of nearly ₹6,000 crore last year.
The hair-oil space has seen some major acquisitions in the past few years. Emami Ltd acquired Kesh King, a haircare brand, from SBS Biotech in 2015 for ₹1,650 crore. In the same year, Hindustan Unilever Ltd acquired Indulekha Hair Oils from Kerala-based Mosons Extractions for ₹330 crore.
In the next few months, True North will look to ensure Sesa is available in all key markets, optimize distribution, speed up marketing and communicate the value proposition to users, Bhargava said. “We will be able to build multiple products around hair care, and look to expand to new categories”, he added.
He also said that True North views the company as a platform for Ayurveda products, not just hair oil.
“New consumers are more aware of Ayurvedic benefits and brands like Sesa, Kesh King and Indulekha have a strong reputation, and will look to grab these new consumers,” said Anurag Mathur, leader and partner at PwC India’s consumer and retail practice.
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