Shapoorji Pallonji Group will sell a controlling stake in Eureka Forbes Ltd. to U.S. private equity firm Advent International.
The transaction values the maker of water purifiers and vacuum cleaners at an enterprise value of Rs 4,400 crore, the group said in a statement.
Deal details
Eureka Forbes, a 100% subsidiary of Forbes & Co., will be spun off into a standalone company and then listed on the BSE Ltd.
After the listing, Advent will purchase up to 72.56% of the company's then outstanding stock on a fully diluted basis from Shapoorji Pallonji Group.
Advent will then make an open offer.
Forbes & Co. had a total market cap of Rs 5,140 crore as of Sept. 17.
The transaction is subject to closing conditions and relevant statutory and regulatory approvals.
Eureka Forbes, the statement said, has more than 20,000 outlets and an e-commerce channel, with a base of over two crore customers.
The cash can help the real estate-to-appliances Shapoorji Pallonji Group pare debt. Earlier, its attempt to raise funds against its shareholding in Tata Sons Pvt., the parent of India's largest conglomerate, had ended in litigation.
Products of Eureka Forbes. (Source: Eureka Forbes Instagram page)
Jai Mavani, executive director at Shapoorji Pallonji & Co. Pvt., said the deal unlocked value for shareholders. “This transaction also reflects our stated objective and strategy of significant deleveraging and focusing on our core competencies and businesses.”
According to Shweta Jalan, managing director at Advent India PE Advisors Pvt., Eureka Forbes is the number one 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.”
Eureka Forbes had revenue from operations of Rs 1,786.3 crore in the fiscal ended March 2021, down 5.2% over a year earlier. Its total comprehensive income stood at Rs 51.5 crore compared with a loss of Rs 400.60 crore in FY20. The company ended FY21 with a negative net worth after impairment of investments and loans to subsidiaries like the Lux group.
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