Advent International, one of the largest global private equity investors, has signed a definitive agreement with Shapoorji Pallonji Group to acquire a majority stake in Eureka Forbes Ltd. (EFL), known for its water purifier brand Aquaguard besides vacuum cleaners, at an enterprise value of ₹4,400 crore.
Advent managed to pip other suitors, including Havells and Electrolux, which, according to sources, were offering a much lower valuation than what the group was expecting.
Pursuant to a scheme of arrangement, the 100% subsidiary of Forbes & Company will be demerged into a standalone company, and listed on the Bombay Stock Exchange. Upon listing, Advent will purchase up to 72.56% of the outstanding stock on a fully diluted basis from the Shapoorji Pallonji Group. Post acquisition, Advent will make an open offer. The transaction is subject to closing conditions and receipt of relevant statutory and regulatory approvals.
Over the last two decades, EFL has built a multi-channel network with a unique direct sales business, strong retail presence in over 20,000 outlets, and a fast-growing e-commerce channel. It has one of the largest and most robust pan-India service networks, with an installed base of over 20-million customers visiting a kitchen every second.
“We are pleased that Eureka Forbes, 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 core competencies and businesses. We thank the EFL family of employees and stakeholders, and firmly believe they will benefit from this transaction,” Jai Mavani, executive director, Shapoorji Pallonji and Company Pvt. Ltd. was quoted as saying in a press release issued by the SP group.
Advent has been investing in India since 2007 and opened its Mumbai office in 2009. Over the past 14 years, the firm has committed $2.2 billion in 16 companies across sectors such as consumer products, financial services, healthcare, industrial and technology. EFL will be Advent’s fifth buyout in the consumer sector, strengthening its position as one of India’s leading retail and consumer investors. Prior to this deal, Advent had made four consumer investments, including Crompton Greaves Consumer Electricals, one of India’s leading supplier of consumer electrical goods; Dixcy Textiles, a leading men’s innerwear brand; Enamor, a leading women’s innerwear brand; and DFM Foods, a leading producer of packaged savory snacks.
“Eureka Forbes 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. We look forward to working with Marzin Shroff and his team to guide EFL’s next phase of growth and solidify its market leadership,” Shweta Jalan, managing director, Advent India PE Advisors, said in a statement.
In FY21, Forbes & Co’s revenues from the health, hygiene, safety products and its services business stood at ₹2,151 crore, 75% of its total revenue of ₹2,857 crore. On a consolidated basis, the company incurred a loss of ₹27.86 crore in FY21. Engineering, real estate, ITES, shipping and logistics comprise the balance 25% of revenue. The company’s three businesses— ITES, shipping and logistics—are loss-making.