Godrej Consumer Products confirmed on April 27 that it will acquire Raymond's consumer care business in an all-cash deal for Rs 2,825 crore.
The deal is expected to be completed by May 10.
Moneycontrol had earlier today reported that Godrej Consumer Products is likely to announce the acquisition of Raymond's consumer care business.
Raymond Consumer Care Limited (RCCL) is a leading player in the deodorants and sexual wellness categories in India. The FMCG business is being sold to Godrej Consumer along with the trademarks of Park Avenue (for the FMCG category), KS, KamaSutra and Premium, through a slump sale, the company stated.
Commenting on the acquisition, Sudhir Sitapati, Managing Director and CEO of GCPL, said: “This acquisition allows us to complement our business portfolio and growth strategy with under-penetrated categories that offer a long runway of growth."
"Raymond is a leading player in the deodorants and sexual wellness categories with brands like Park Avenue and KamaSutra. These categories have the potential to deliver double-digit multi-decade growth given the low per capita consumption in India compared to similar emerging markets. Per-capita consumption (USD) of deodorants in India is 0.4x that in Indonesia, 0.05x that in Brazil and 0.04x that in the USA. We look forward to building on this potential by unlocking the significant integration synergies with our business," Sitapati added.
Moreover, Atul Singh, Group Vice-Chairman, Raymond Group, said, "Having brought these brands at the forefront of consumer recall, we believe that Godrej Consumer Products will provide the requisite impetus to further drive the growth of these brands.”
According to sources, InCred-Mape was the sell side i-banker to the deal. Law firm Khaitan and Co advised Godrej while Shardul Amarchand Mangaldas advised Raymond.
Meanwhile, shares of Raymond on April 27 closed 6.55 percent higher at Rs 1,717.35 apiece on BSE on anticipation of the deal, while Godrej Consumer Products ended 2.35 percent lower at Rs 953.20. Both companies have press conferences scheduled for later in the day.
Raymond Consumer Care is an associate company of Raymond Ltd, a branded textile and real estate company. Raymond Ltd holds over 47 percent of the consumer care business, which houses Park Avenue and KamaSutra brands and had annual sales of Rs 522 crore in the last fiscal.
In its FY22 annual report, the company said it has a presence in over 6,50,000 retail outlets with strong reach in chemist channel, modern trade and e-commerce. Raymond Consumer Care also has a condom manufacturing facility with a 40 crore capacity per annum in Aurangabad, Maharashtra.
On the other hand, Godrej Consumer Products has been focusing on category development by building accessibility, brand relevance and sampling. Its small packs of hair colour cream and air fresheners have resulted in market share gains.
Godrej Consumer already has personal care products, but if the acquisition happens, it will mark the company’s foray into sexual wellness, too.
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