Private equity investor Advent International has signed a definitive agreement with the Shapoorji Pallonji Group (SPG) to acquire a majority stake in Eureka Forbes Ltd.
The transaction values Eureka Forbes Ltd (EFL) at an enterprise value of Rs 4,400 crore, subject to closing adjustments. EFL is a market leader in the health and safety solutions space in India, with a presence in water purification, vacuum cleaning and other emerging categories.
"Pursuant to a scheme of arrangement, Eureka Forbes Limited, a 100 per cent subsidiary of Forbes & Company Limited will be demerged into a standalone company and then be listed on the BSE Limited. Upon listing of EFL, Advent will purchase up to 72.56 per cent of the company's then outstanding stock on a fully diluted basis from SPG," a joint release from the companies said.
Thereafter, Advent will make an open offer in compliance with applicable regulations. The transaction is subject to closing conditions and receipt of relevant statutory and regulatory approvals, it added.
EFL has a multi-channel network with a direct sales business, strong retail presence in over 20,000 outlets, and a fast-growing e-commerce channel.
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The deal will help SPG reduce its debt. "We are pleased that Eureka Forbes Limited, a jewel in the Shapoorji Pallonji Group has found a new home with Advent while at the same time unlocking value for shareholders. This transaction also reflects our stated objective and strategy of significant de-leveraging and focusing on our core competencies and businesses," said Jai Mavani, Executive Director of Shapoorji Pallonji and Company Private Limited.
The company firmly believes that it will benefit from this transaction, he added.
"Eureka Forbes Limited is the No. 1 player in an under-penetrated market poised for strong growth over the next several years. Their Aquaguard brand is a household name in water purification, helping safeguard the health and well-being of a large segment of the Indian population," Shweta Jalan, Managing Director of Advent India PE Advisors Private Limited said, adding that the firm will work with EFL MD Marzin Shroff and his team to guide its next phase of growth and solidify market leadership.
Advent has been investing in India since 2007. Over the past 14 years, it has invested or committed $2.2 billion in 16 companies with headquarters or operations in India across sectors such as consumer products, financial services, healthcare, industrial and technology.
EFL will be Advent's fifth buy out in the consumer sector in India, strengthening its position as one of India's leading retail and consumer investors. Before this, it had made four consumer investments in India -- Crompton Greaves Consumer Electricals, Dixcy Textiles, Enamor and DFM Foods.
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