Packaged consumer goods major Godrej Consumer Products Ltd (GCPL) today announced the acquisition of the fast-moving consumer goods (FMCG) business of Raymond Consumer Care Limited (RCCL) for ₹2,825 crore. Raymond owns deodorants and sexual wellness brands like Park Avenue and KamaSutra.
The cash deal is expected to be completed by May 10, 2023. The Singhania family-backed Raymond group had been looking to divest its consumer care business for over two years. Last year, content-creator-commerce conglomerate Good Glam Group was in talks to acquire Raymond's consumer care business but the deal could not materialise due to higher valuation.
Raymond Consumer Care's FMCG (fast-moving consumer goods) business is being sold to GCPL, along with the trademarks of men’s grooming brand Park Avenue (for the FMCG category), deodorant KS, sexual wellness brand KamaSutra and Premium, through a slump sale, Godrej Consumer Products informed via a stock exchange filing.
Sudhir Sitapati, managing director and CEO, Godrej Consumer Product, said the company is excited to welcome the Raymond Consumer Care team and brands to Godrej Consumer Products. "This acquisition allows us to complement our business portfolio and growth strategy with under-penetrated categories that offer a long runway of growth."
Raymond is a leading player in the deodorants and sexual wellness categories. As per Sitapati, these categories have the potential to deliver "double-digit multi-decade growth", given the low per capita consumption in India compared to similar emerging markets.
Per-capita consumption (USD) of deodorants in India is 0.4x that in Indonesia, 0.05x that in Brazil and 0.04x that in the USA.
"We look forward to building on this potential by unlocking the significant integration synergies with our business,” he said. Atul Singh, group vice chairman, Raymond Group, said the company takes pride in building strong homegrown brands that are amongst the leaders in their categories. "Having brought these brands at the forefront of consumer recall, we believe that Godrej Consumer Products will provide the requisite impetus to further drive the growth of these brands,” he said.
Raymond Consumer Care had reported sales worth ₹411 crore in FY21; ₹522 crore in FY22; and ₹622 crore in FY23.
Early today, Godrej Consumer Care shares opened flat at ₹976 against the previous closing price of ₹976.10 on the BSE. The stock closed 2.19% at ₹954.80 on the NSE. The shares of Raymond surged 8.9% to hit a 52-week high of ₹1,755.35 against the previous closing price of ₹1,611.75 on the BSE. The stock closed 6.15% to ₹1,711 on the NSE.
Raymond Consumer Care is the FMCG entity of the 90+-year-old diversified conglomerate with leadership status in the Indian deodorant and condom market and a competitive presence in multiple other categories. Godrej Consumer Products is a part of the 125-year-young Godrej Group. It is expected to deliver double-digit volume and value growth in the March quarter on the back of steady performance by both home care and personal care businesses.