Naturals to sell upto 20% to PEs to fund tuck-in acquisitions

In 2012, the company had offered about 25% stake, but a deal could not be sealed

Chennai-based Naturals, which runs 300 salons in India, is planning to raise about Rs 50 crore from external investors, including private equity, for less than 20% stake to fund tuck-in acquisitions over the next one year, its managing director and co-founder CK Kumaravel said here on Wednesday.

“We have identified some region-specific salons with 10-15 outlets in each region. We hope to finalise plans by April next year, and the fund raising is likely to be completed by September next year,” he said. Through these tuck-in acquisitions, Naturals targets to add about 100 salons. “This would give us an inroad to the markets where we are not present currently,” said Kumaravel.

However, this is not the first time Naturals is trying to raise funds from private equity investors. In 2012, it had offered about 25% stake, but a deal could not be sealed. The company’s advisor Ernst & Young had that time held talks with private equity investors like Carlyle Group, Sequoia Capital, Motilal Oswal Private Equity Advisors and TVS Capital, according to media reports in July 2012.

“This time, we are yet to hire any banker. We intend to reach news set of investors,” said Kumaravel. The company also said that it aims to open 3,000 salons by 2017. “Most of these would be through franchisee,” he added.

Naturals is 95% owned by Kumaravel and his wife. CK Rangathan, who is the managing director of FMCG company CavinKare Pvt Ltd, has about five% stake in Naturals.