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Talks for selling Kesh King, the biggest brand of the Himachal Pradesh-based SBS Biotech, have fallen through.
SBS Biotech's promoter, Sanjeev Juneja, called off the deal, citing a valuation mismatch. Sunil Muthreja, chief executive and executive director, SBS Biotech, said the asking price for Kesh King was over Rs 2,200 crore, "but, offers were Rs 1,700-1,800 crore". Deloitte India was advising SBS Biotech.
Mid-tier consumer good companies, including Emami, Dabur, Bajaj, and Wipro, were in the race for the brand. Emami and Bajaj were the front runners. Emami put in the highest bid.
Emami's directors Harsh Agarwal and Aditya Agarwal were not available for comments, but persons said the asking price was steep. "This is just one brand and paying six to eight times the sales defied logic," an executive, who was part of the negotiations, said.
In 2010, the Ahmedabad-based Paras Pharma was sold for eight times its revenue because the company had category leaders such as Livon, Set Wet, Moov, Zatak, Ring Guard and Itch Guard.
SBS Biotech is expecting Rs 425 crore sales revenue from Kesh King in 2014-15. SBS Biotech was set up by Sanjeev Juneja in 2009. The company launched Kesh King as a brand the same year. Under Kesh King, SBS Biotech sells hair oil, shampoo, and ayurvedic capsules.
Kesh King sells, apart from north India, in Saudi Arabia, Yemen, and the Philippines. Besides Kesh King, SBS Biotech sells Dr Ortho, Sachi Saheli, More Power, Memory Mantra, Rajsee ayurvedic capsules, and Roop Mantra face cream.
SBS Biotech's competitors include Emami, Dabur, Bajaj and Marico, all of which sell hair oils in a Rs 8,000-crore market. Amla hair oil and hair-fall cures are growing faster than the sector average of five-six per cent a year. Hair-fall cures such as Kesh King are growing at around 14-15 per cent a year.
"When other players were targeting hair fall through shampoos, we developed a solution through oil. We are present all over the country except in the northeast and Kerala," Muthreja said.
