True North in talks to pick up a stake in Sesa Hair Oil
Sesa Hair Oil maker Ban Labs is looking to raise as much as Rs400 crore from True North
Mumbai: Ban Labs Pvt. Ltd, a maker of hair care products including the popular Sesa Hair Oil, is in advanced talks to raise as much as Rs 400 crore from private equity fund True North Capital, two people aware of the development said.
True North plans to acquire a large minority stake in the Sesa Hair Oil brand which will be held under a new entity, the people mentioned above said on condition of anonymity.
Mint had reported in July 2016 that Ban Labs had put the brand on the block and was seeking a valuation of close to Rs 1,200 crore for the business but had failed to find a buyer then. Among those who had expressed initial interest in the brand were FMCG companies Marico Ltd, Bajaj Corp. Ltd and Wipro Consumer Care and Lighting.
Founded in 1996 by D.K. Patel, Rajkot-based Ban Labs sells the Sesa hair care brand of shampoo and conditioners, hair care treatment and herbal hair care. Apart from the Sesa brand, Ban Labs also owns other brands such as Charm & Glow (cosmetics), Caley (soaps and bar) and Drs Care (detergent and dish wash). Sesa hair oil in particular has a strong presence in Gujarat and Maharashtra.
An email sent to Ban Labs remained unanswered while a True North spokesperson declined to comment.
The hair oil category has witnessed some large transactions in recent years with several personal care companies looking to monetise popular brands by divesting partial or complete stake.
Some of the recent large deals include Emami Ltd buying hair and scalp care business under the Kesh King brand from Himachal Pradesh-based SBS Biotech Pvt. Ltd for Rs 1,651 crore in 2015 and Hindustan Unilever Ltd (HUL) acquiring Kerala-based hair oil brand Indulekha for Rs 330 crore in 2015.
True North (earlier known as India Value Fund Advisors) was established in 1999 and is one of the early movers in Indian private equity space. It has made investments in consumer-facing businesses which include healthcare, media and entertainment, radio taxis, retailing, and food services and financial services. Over the years, the PE firm has launched five separate investment funds with a combined corpus totalling over $2 billion. It is currently in the process of raising its sixth fund worth $1 billion. According to Research and Markets, India’s hair care market has been growing with a CAGR of 16.95% over the last five years and is projected to increase further by 2021 due to rising personal care, brand awareness and increasing disposable income.
At present, HUL, P&G, Dabur, Marico and Godrej are the market leaders in the organized hair care market. India’s hair care market is segmented into four categories—hair oil, hair shampoo, hair colours and hair styling products.
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