Godrej in pact to buy Latin American hair care firm1 min read . Updated: 23 May 2010, 11:54 PM IST
Godrej in pact to buy Latin American hair care firm
Mumbai: Personal care products maker Godrej Consumer Products Ltd (GCPL) is taking its global acquisitions spree to Latin America. On Sunday, it announced an agreement to buy a 100% stake in the Issue Group, which makes hair care products.
The buyout is GCPL’s first in Latin America and the fourth in the past three months, taking total acquisitions since 2006 to six.
“These acquisitions make us a leading player in 19 countries—five in Asia, 10 in Africa and now four in Latin America," chairman Adi Godrej said.
“It also makes us the second largest personal (care) products and insecticides company (in India), following Hindustan Unilever (Ltd), with sales of Rs4,000 crore, a third of which—or 35% revenues—(are) from overseas operations," said Godrej.
The Issue Group comprises Laboratorio Cuenca SA, Consell SA, Issue Uruguay and Issue Brazil. The Issue brand enjoys volume leadership in Argentina, with a market share in excess of 20%. The business had revenues of over $33 million (Rs155 crore) in 2009.
Godrej said his company will continue looking for more acquisitions as part of efforts to become the market leader in the hair care, insecticides and soaps categories in Asia, Africa and Latin America. In December, the GCPL board had approved raising up to Rs3,000 crore through debt and equity for mergers and acquisitions. “Very soon we will make announcements on funding options through PE (private equity) investors and QIP (qualified institutional placements)," he said.
“The company would have spent close to Rs2,500 crore on its past acquisitions through a combination of debt and equity," said Anand Shah, sector analyst at Angel Broking Ltd.
He expects GCPL to make more such acquisitions as it looks to expand in emerging and developing markets.
Acquisitions this year include the purchase of a 51% stake in its Indian joint venture with US-based Sara Lee Corp. earlier this month, and the buyout of PT Megasari Makmur in Indonesia in mid-April and Tura in Nigeria in early March.