Rose Merc, a company that had its stock appreciate more than five-fold over a year, has bought varied businesses at eye-popping valuations over this period.
The most recent was Rose Merc’s all-cash acquisition of organic healthcare company Abaca Care at a valuation of 185 times its net worth as of FY23. Rose Merc agreed to pay Rs 51 lakh for 51 percent of Abaca's share capital, it said in a January 9 exchange filing.
Abaca's net worth was Rs 53,999 as of January 9. At Rs 1 crore, its valuation is 185.18 times its net worth. Abaca was founded on May 17, 2023, has not reported any revenue yet, and posted a loss of Rs 46,001.
"This investment would allow our company to partner with the leading and fast-growing market of organic healthcare products," Rose Merc said in the filing.
This acquisition was originally to be completed through a share-swap – 51,000 shares of Abaca for 51,000 shares of Rose Merc. But the transaction did not go through because of "certain technical commercial difficulties." Subsequently, "at the request of Abaca and its promoters," Rose Merc agreed to invest Rs 51 lakh for a 51 percent stake in Abaca.
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Rose Merc's share doubled from Rs 28 on January 12 to Rs 60 on December 11, and then surged to Rs 153 by January 5.
This was Rose Merc’s second highly valued acquisition in six months. In September, Rose Merc acquired a 46.67 percent stake in event and artist management firm Outcry Media Solutions in a Rs 7 crore share-swap deal, valuing the target company at Rs 15.02 crore.
Previously, Outcry was known as Fyopro Services, which had a negative net worth with liabilities of Rs 31.88 lakh in FY23. Fyopro reported revenue of Rs 2.92 crore and net profit of Rs 23.19 lakh in FY23. For the acquisition, Outcry was valued at more than 5x its annual revenue and 64x its net profit.
The objective of this acquisition was to allow Rose Merc to tie up with the leading and fast-growing event management company for talent promotion, product launches, creative branding, and experiential marketing campaigns, it said in a filing dated September 4, 2023.
Rose Merc, which used to sell astro-occult products, said on its website that it aims to be a diversified business group. The Mumbai-based company owns an interest in Bhakti World Radio Broadcasting, financial consultancy and merchant banker Capital Square, and sports management company Jadhav Rose Merc Sports.
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