To boost its consumer care and lighting business, which contributes close to 9 per cent to its top line, Wipro has acquired the business of Yardley in Asia, West Asia, Australasia and certain African markets from UK-based Lornamead Group for $45.5 million (around Rs 210 crore). The transaction is expected to be completed by mid-December and revenue would start flowing from the March quarter.
Yardley is a premium brand in the consumer care segment with fragrance, bath & shower and skin care products, including Lavender and Red Roses in the perfume segment.
Seventy per cent of Yardley’s revenues come from West Asia, while India accounts for 20 per cent. Talcum powder is the largest product, accounting for about 40 per cent of its revenues, followed by deodorants with 19 per cent. The acquisition will help Wipro almost double its consumer care revenues from West Asia, from about $15 million to over $30 million.
“We wanted to acquire Yardley because we thought it is an iconic brand across West Asia, India and Singapore. We missed it in 2005, when Lornamead acquired it from P&G. Even though we paid a higher premium to acquire the business now, compared with Unza (which Wipro had last acquired for its consumer care business), we still feel this will fetch us the right value for money and will make us a strong player in Asia,” Wipro Consumer Care and Lighting President Vineet Agrawal said.
He added Yardley was a profitable brand and its operating margin was higher than Wipro Consumer Care’s operating margin at about 12-13 per cent. Lornamead Group acquired Yardley from Procter & Gamble (P&G) in 2005, following which the company invested in the brand’s product development, distribution channels and merchandising across international markets.
Lornamead will retain Yardley business in Europe and the Americas.
Wipro will also acquire about 100 people, primarily in sales and marketing roles across these geographies with this acquisition. While Wipro intends to continue with the third-party manufacturing model as practised by Yardley, the company also wants to manufacture Yardley’s soap brands from its plants at Baddi in Himachal Pradesh and in Karnataka.
This is Wipro’s fifth acquisition for the consumer care business.
