Buy-out fund Advent to acquire Eureka Forbes in Rs4,400-cr deal

The transaction values Eureka Forbes at an enterprise value of Rs4,400 crore, subject to closing adjustments.

As per the scheme of arrangement, Eureka Forbes Limited, a 100 per cent subsidiary of Forbes & Company Limited, will be demerged into a standalone company and then listed on the BSE Limited. Upon listing of EFL, Advent will purchase up to 72.56 per cent of the company’s then outstanding stock on a fully diluted basis from SPG. Advent will thereafter make an open offer in compliance with applicable regulations. 

The transaction is subject to closing conditions and receipt of relevant statutory and regulatory approvals, Advent stated in a release. 

EFL has grown to become one of India’s most admired organisations over the last two decades. It has been a household name and product-of-choice for almost four decades with strong market leadership and brand equity. The company has built a multi-channel network with a unique direct sales business, strong retail presence in over 20,000 outlets, and a fast-growing e-commerce channel. EFL has one of the largest and most robust pan-India service networks, with an installed base of over 20 million customers visiting a kitchen every second. EFL has earned the trust of its customers through its long-established power brands such as Aquaguard, which is synonymous with the water purifier category, and Forbes, known for its ‘Make for India’ range of vacuum cleaners.

“We are pleased that Eureka Forbes Limited, a jewel in the Shapoorji Pallonji Group, has found a new home with Advent while at the same time unlocking value for shareholders. This transaction also reflects our stated objective and strategy of significant de-leveraging and focusing on our core competencies and businesses. We thank the EFL family of employees and stakeholders, and firmly believe they will benefit from this transaction.” said Jai Mavani, executive director, Shapoorji Pallonji and Company Private Limited.

“Eureka Forbes Limited is the No 1 player in an under-penetrated market poised for strong growth over the next several years. Their Aquaguard brand is a household name in water purification, helping safeguard the health and well-being of a large segment of the Indian population. We look forward to working with Marzin Shroff and his team to guide EFL’s next phase of growth and solidify its market leadership” said Shweta Jalan, managing director, Advent India PE Advisors Private Limited.

Advent has been investing in India since 2007 and opened its Mumbai office in 2009. Over the past 14 years, the firm has invested or committed $2.2 billion in 16 companies with headquarters or operations in India across sectors such as consumer products, financial services, healthcare, industrial and technology. 

Advent has invested $14 billion in 80 companies in the consumer sector worldwide. In India, Advent has made four such investments, including in Crompton Greaves Consumer Electricals, India’s leading supplier of consumer electrical goods; Dixcy Textiles, a leading men’s innerwear brand; Enamor, a leading women’s innerwear brand; and DFM Foods, a leading producer of packaged savory snacks. Eureka Forbes Limited will be Advent’s fifth buyout in the consumer sector, strengthening its position as one of India’s leading retail and consumer investors.

Standard Chartered Bank is serving as sole financial advisor, Desai & Diwanji is acting as legal counsel, Katalyst Advisors Pvt Ltd is acting as structuring and tax advisor, Boston Consulting Group is acting as the commercial due diligence and strategic advisor and KPMG India is acting as financial diligence advisors to the Shapoorji Pallonji Group and the company.