Emami Acquires Dermicool Brand From Reckitt For Rs 432 Crore
Emami has now become the leader in the cool talc niche category overtaking Nycil, owned by Zydus Wellness.
Emami Ltd. has acquired Reckitt’s Dermicool brand for Rs 432 crore, excluding taxes and duties, to become India's largest prickly heat powder and talc maker.
“The acquisition is funded through internal accruals and is subject to customary closing conditions,” the Kolkata-based company said in its stock filing on Friday.
The deal marks yet another acquisition of a consumer brand by Emami. Identified with the jingle ‘Aaya mausam thande thande Dermicool ka’, the company said the talc brand commands a 20% market share in the category. The "problem solution niche product" is poised for strong growth as global warming and soaring summer temperatures are a key concern, it said.
The acquisition of the Dermicool brand offers "great synergy with our existing businesses and is a perfect strategic fit”, said Harsha V Agarwal, director, Emami Ltd. “It will strengthen our presence to make us number one in the prickly heat powder and cool talc category.”
Emami also sells talcs under its Navratna and Boroplus brands. Navratna leads the cool hair oil segment and is the second largest brand in the prickly heat powder segment.
Emami has now become the leader in the cool talc niche category, overtaking Nycil, owned by Zydus Wellness Ltd. The deal “would also help realise synergetic benefits and optimize costs”, the company said.
“Nycil is now the number two player as Emami, which had a market share of 25%, will now command 45%,” said Abneesh Roy, executive director- institutional equities at Edelweiss Securities.
Reckitt (erstwhile Reckitt Benckiser) had acquired Dermicool from Paras Pharmaceuticals, along with other brands such as Moov and D’Cold, for Rs 3,260 crore in 2010. In 2012, Marico edged out Emami to buy Set Wet, Livon, and Zatak from Paras.
Besides its core segment, Emami has been investing in direct-to-consumer brands. Earlier this month, the homegrown FMCG company acquired 19% stake in nutrition products maker Tru Native F&B Pvt. for an undisclosed amount.
It also raised its stake in Helios Lifestyle — a D2C start-up that sells male grooming products under The Man Company brand — last year in June. Zandu, Kesh King and German brand Creme 21 are some of the other brands it acquired over the last few years.
“The company considers acquisitions that not only add value and have synergy with the current line of businesses, but also offer opportunities for the organisation to be present in categories that have high growth potential,” it said.
Emami has a domestic distribution network of more than 3,500 distributors and 4,000 sub-distributors, with a direct reach across nine lakh retail outlets and overall reach to over 45 lakh outlets. Emami also exports to over 60 countries.
