Anil Ambani PE-backed kitchen appliance maker Butterfly Gandhimathi Appliances Ltd (BGMAL) is buying a unit from its promoter's privately held company LLM Appliances Ltd for a consideration of Rs 47.75 crore. Through this acquistion the company obtains perpertual rights to trademark "Butterfly" and will add 15 products to BGMAL's offerings.
BGMAL backed by Reliance Equity Advisors, which invested Rs 100 crore two years back, today announced the acquistion of domestic kitchen & domestic electrical appliances division from the association company LLM Appliances Ltd. Through this acquistion the company obtains perpertual rights to trademark "Butterfly".
The brand in perpetuity includes the right to offer the entire range of Domestic Kitchen and Domestic Electrical Appliances globally.
LLM Appliances Ltd (LLMAL) is engaged in the procurement/ manufacturing and marketing of domestic kitchen and domestic electrical appliances under the trade name and trademark "Butterfly", without any overlap with BGMAL's products.
Through this acquistions the company can now operate freely in the entire domestic kitchen and domestic alliances segmetns with the brand, said the company.
The acquistion will also add 15 products to BGMAL's product basket including induction cooktops, rice cookers, air-coolers and fans and it will boost BGMAL's existing sales and marketing strength and distribution network, said the company.
"The combined volumes will also enhance BGMAL's negotiating power and status with suppliers and distributors," said the company.
Based on ICICI Securities, BGMAL has acquired the business for a lump sum consideration of Rs 47.75 crore.
The revenue generated by this division of LLMAL upto March 2014 was around Rs 81 crore.
V M Seshadri, managing director, BGMAL said that this reorganisation is value accretive, synergetic and strengthens the Butterfly brand offering.
Most of the products added by way of this acquistion are sunrise products, the market for which will steadily increase in the coming years. In the long term, BGMAL will consider manufacturing these products in-house once these products achieve critical mass through sustained growth.
He added, the company is now investing in R&D capablities to agument, through this acquistion, the R&D capablities will be leveraged across the entire range of domestic kitchen and domestic electrical appliaces, thereby enhancing sysnergies and delivering value for money to the consumer.
