Private equity firm Advent International will buy a controlling stake of 72.56 percent in Eureka Forbes from Shapoorji Pallonji Group for approximately Rs 4,400 crore, said a joint statement issued by the two entities on September 19.
This transaction will be Advent’s fifth consumer buyout in India. The deal is also expected to help Shapoorji Pallonji Group (SPG) in significantly deleveraging its balance sheet.
Pursuant to a scheme of arrangement, Eureka Forbes will be listed on the Bombay Stock Exchange (BSE), and subsequently, “Advent will purchase up to 72.56% of the company’s then outstanding stock on a fully diluted basis from SPG”, an official release noted.
Earlier on September 9, Moneycontrol broke the news of Advent International emerging as the lead suitor to acquire Eureka Forbes.
On June 28th, 2021, Moneycontrol had reported that three bidders, namely Advent International, Warburg Pincus, and Swedish home appliance maker Electrolux had been shortlisted for the sale process of Eureka Forbes.
Commenting on the acquisition of controlling stake in Eureka Forbes, Shweta Jalan, Managing Director and head (India) of Advent International, said the acquaguard brand is the “no. 1 player in an under-penetrated market poised for strong growth over the next several years.”
The company is a household name in water purification, helping safeguard the health and well-being of a large segment of the Indian population, Jalan added.
Jai Mavani, Executive Director of Shapoorji Pallonji and Company Pvt Ltd, said the transaction with Advent “reflects our stated objective and strategy of significant de-leveraging and focusing on our core competencies and businesses.”
Notably, Eureka Forbes is a subsidiary of listed parent Forbes & Company and the 150-year-old Shapoorji Pallonji group is keen to take advantage of the health, hygiene, and home improvement wave post-COVID-19, unlock value and reduce its debt through the proposed transaction.
Eureka Forbes’ new controlling entity, Advent, has a sprawling consumer portfolio in India which includes DFM Foods, men’s innerwear brand Dixcy Textiles & Crompton Greaves Consumer Electricals. Over thepast 14 years, the firm has invested or committed $2.2 billion in 16 companies with headquarters or operations in the country.