Wipro Consumer Care and Lighting (WCCL) on Tuesday said it has signed a definitive agreement to acquire South Africa-based personal care company Canway Corp., which markets brands such as Oh So Heavenly, Iwori, and IQ.
The transaction is expected to be completed by January-end. However, the transaction value was not disclosed.
Canway posted revenues of around $21 million last year.
WCCL, the $1 billion-plus arm of Wipro Enterprises, has spent $950 million in acquisitions so far. Canway is its 12th acquisition in the last 16 years and the second one this year. In April, WCCL acquired Splash Corp., the Philippines’s largest personal care company.
Oh So Heavenly, which accounts for 80% of Canway’s sales, is a popular personal care brand in South Africa, selling exclusively through Clicks, one of the leading health and beauty retailers in the country. “The Oh So Heavenly brand enjoys market-leading position in multiple categories such as bath and shower, hand creams, fragranced body sprays, and children’s products. It is a leader in the gifting segment that constitutes a large portion of the South African personal care market," Wipro said.
The Iwori brand, which uses key organic African ingredients, was launched recently with considerable success, WCCL said. The company has its own manufacturing plant and research and development centre in Durban.
“This acquisition gives WCCL a significant entry into South Africa and other African markets. It is an important milestone for us given our vision of being among the top three players in personal care in Asia and Africa. We are excited to be in South Africa, the largest personal care market in Africa and the second-largest economy of the continent," said Vineet Agrawal, chief executive officer of WCCL.
In India, the top seven best-selling personal care categories include cosmetics, fragrance, men’s grooming, skincare, bath and shower, hair care and oral care. Out of them, specialized categories such as cosmetics, fragrance, men’s grooming and skincare, are set to overtake the growth of generic categories. By 2020, these specialized categories will contribute 40-45% to the overall market, said a 2018 report by market research firm RedSeer Consulting.
On bringing Canway products to India, Agrawal said the company is yet to evaluate the launch in the country but is likely to come up with a plan by the end of January. “The Oh So Heavenly brand portfolio can be expanded to other international markets where Wipro has a strong footprint," said Raghav Swaminathan, chief financial officer, Wipro Enterprises.
Analysts believe the acquisition is a positive strategy for WCCL.
“For fast-moving consumer goods companies, Africa has always been on their radar for a while now. Essentially what companies such as WCCL are doing is entering the market through brands that already have a strong presence there and they might gradually push their own products," said Harminder Sahni, managing director at Wazir Advisors.