The deal allows the American PE firm to hold a stake of 72.56% in the Mumbai-based consumer goods business, EFL.
On September 19, 2021, Eureka Forbes, a fully-owned subsidiary of the Shapoorji Pallonji Group, was reportedly sold to Advent International, a Private Equity Major in a deal worth Rs. 4,400. The deal allows the American PE firm to hold a stake of 72.56% in the Mumbai-based consumer goods business.
As a part of the agreement, Eureka Forbes Limited(EFL) will certainly be demerged into a standalone company, followed by its listing at the Bombay Stock Exchange(BSE). Upon the acquisition of EFL, Advent will present an open offer, conforming to the SEBI’s takeover regulations.
The major sale of its wholly-owned subsidiary will help Shapoorji Pallonji Group to cut off its large share of debt valuing over Rs. 10,900 crore as reported by the Financial Express. The proceeds from the sale will be used by the business to pay off its lenders including banks which approved for the OTR(one-time restructuring) of debt last year after the business failed to repay its loans.
Founded in 1982, Eureka Forbes is a Mumbai-based global consumer goods company under the Shapoorji Pallonji Group. It serves consumer durable goods including vacuum cleaners, water purifiers, air purifiers, etc.
Jai Mavani, Executive Director at Shapoorji Pallonji and Company Pvt Ltd. said, “We are pleased that Eureka Forbes, a jewel in the SP 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 competences and businesses.”
“Eureka Forbes’s Aquaguard brand is a household name in water purification, helping safeguard the health and well-being of a large segment of the Indian population. We look forward to working with Marzin Shroff and his team to guide EFL’s next phase of growth and solidify its market leadership,” said Shweta Jalan, Managing Director at Advent India PE Advisors.
Including Eureka Forbes, Advent now has five acquisitions in the consumer segment. The other four of its buyouts in the Indian consumer sector include Crompton Greaves Consumer Electricals, DFM Foods, Enamor, and Dixcy Textiles. Apart from the consumer-based commodities, the PE firm also holds stake in other sectors in India such as healthcare, technology, industry, financial services, etc.
Founded in 1984, Advent International is one of the largest and longest-serving independent private equity partnerships. It has cumulatively invested over $56 billion across 42 countries. The company has been investing in India since 2007 where it works on growth strategies and acquisitions in the Indian market.
In February 2021, the global private equity firm announced its acquisition of a considerable stake in ZCL Chemicals Limited ( ZCL) which is one of the fastest-growing pharmaceutical companies in India. The company’s other investments in the Indian healthcare segment include Bharat Serums and Vaccines (BSV), leading in biopharmaceutical space, RA Chem Ltd, etc.
