FMCG player Emami today announced acquisition of ayurvedic hair and scalp care brand Kesh King for Rs 1,651 crore in its foray into the fast-growing haircare segment.
"The acquisition marks Emami's foray into the ayurvedic hair and scalp care segment, which is growing at a rapid pace," Emami said in a statement.
It further said: "The transaction envisages transfer of the business as a growing concern on a slump sale basis and will include brand portfolio of ayurvedic medicinal oil, herbal shampoo and conditioner and ayurvedic capsules, along with its respective formulations and all related assets, rights and liabilities, including working capital for a total consideration of Rs 1,651 crore."
Emami Director Harsha V Agarwal said: "This acquisition is part of our aggressive growth strategy... We plan to leverage the target business with our existing strength to make our presence stronger and deeper. The transaction is a perfect strategic fit for Emami."
On the funding part, Emami CEO - Finance, Strategy & Business Development N H Bhansali said: "The acquisition will be funded by a judicious mix of surplus funds, short-term and long-term debt and the process is expected to be completed in a month."
Emami has been acquiring brands domestically and internationally to wade into new product categories.
Earlier this year, the FMCG major acquired a controlling stake in Australia-based Fravin Pty, along with its three subsidiaries for an undisclosed sum. Fravin Pty manufactures natural and organic personal care products.
Last year, it acquired sanitary-napkin brand 'She Comfort' from Royal Hygiene Care in an undisclosed all-cash deal to enter into the Rs 2,100-crore women's hygiene segment dominated by Procter & Gamble and Johnson & Johnson.
The company also acquired Zandu brand in 2008 for Rs 700 crore.
Emami Director Priti A Sureka said that as part of its core business strategy, the company has always been open to growth through inorganic route.
"We always consider acquisitions that not only add value and have synergy with our current line of business, but also offer opportunities for us to be present in categories that have high growth potential," she added.
Kesh King brand, introduced in 2009 by Sanjeev Juneja, offers products such as oil, herbal shampoo and conditioner and ayurvedic capsules.
The brand has presence in 5.4 lakh outlets across India and had a turnover of around Rs 300 crore in 2014-15.
Emami's current oil portfolio includes Navratna Cool Oil and Emami 7 Oil in One Damage Control Hair Oil.
