GCPL chairman Adi Godrej, in an interview, on CNBC-TV18, expects the acquisition of Soft & Gentleto be accretive in the first year and is optimistic that the UK business will continue to outperform the market.
Godrej Consumer Products Ltd (GCPL) announced on Tuesday that its UK subsidiary Keyline has acquired Soft & Gentle, the UK's fourth largest deodorant-for-women brand by market share, from Colgate-Palmolive. GCPL chairman Adi Godrej, in an interview, on CNBC-TV18, expects this acquisition to be accretive in the first year and is optimistic that the UK business will continue to outperform the market.
Below is the edited transcript of the Godrej's interview on
Q: Are acquisitions going to be preferred strategy for growth of the Godrej group in 2013?
No. We are growing strongly organically too, but our Ten-by-Ten strategy, to grow ten times in ten years, would need acquisitions because achieving our objective requires a compound annual growth rate (CAGR) of about 26 percent. It will be difficult for many of our businesses to organically grow at that rate.
So we were looking at acquisitions, especially by Godrej Consumer Productsm and this acquisition is by Keyline Brands, which is a wholly-owned subsidiary of Godrej Consumer Products. We have been able to make this acquisition at a very reasonable cost. It will be extremely accretive and strategically very important for Keyline Brands and Godrej Consumer Products.
Q: Will the acquisition be EPS accretive right from the start? Will you adopt a strategy of funding acquisitions through low cost debt?
It is extremely accretive. We expect it to be accretive from day one.
Q: Is 2013 going to be a big year of inorganic growth for you?
We have already announced several acquisitions on which will move forward during 2013. We have completed the first phase of our major acquisition in Africa's Darling Group and the completion of the second phase is underway with the third phase to be finisher in about a year's time.