Advent International to Buy Majority Stake in Eureka Forbes
Advent International, a global private equity firm has signed a definitive agreement with Indian Multinational consumer goods company Eureka Forbes Limited (EFL) based in Mumbai to acquire majority stake at an enterprise value of ₹ 4,400 crore.
About Eureka Forbes and Detail’s of the Sale Process
Eureka Forbes is one of 17 companies under the Shapoorji Pallonji Group, founded in 1982, and is a subsidiary of Shapoorji Pallonji Group company – Forbes & Company. It is into Vacuum cleaners, Water purifiers, Air purifiers, Security solutions. Eureka Forbes’s brand Aquaguard is synonymous with water purifiers in India.
Under the sale process, Eureka Forbes will be de-merged into a standalone company and will be listed on BSE. After, which Advent will buy up to 72.56 percent of EFL’s stock on a fully diluted basis from Shapoorji Pallonji Group.
How does the Eureka Forbes Deal Help Shapoorji Pallonji Group
At present Shapoorji Pallonji Group’s total debt is at ₹ 20,000 Crore. This large transaction will help the group reduce its debt burdened.
The Group is also panning monetization of some of its other assets by selling group companies, including Sterling and Wilson Solar, a solar EPC solutions provider and Afcons Infrastructure, a major construction company.
What Eureka Forbes Buyout means for Advent International
A major reason for Advent to buyout Eureka Forbes’s is the increasing demand of water purifiers in India and Eureka Forbes’s renowned product Aquaguard being a household name in water purification.
It is estimated that the water purification appliances market in India will reach a market size of almost $4 billion by the end of 2024.
Marzin R Shroff, Managing Director & CEO, Eureka Forbes said “Having delivered innovative products and solutions for our ever-growing customer base, we are now buoyant about the opportunity to unlock further growth and are excited to embark on this new journey with the promise of a better tomorrow”.
Expressing Thoughts on the deal Shweta Jalan, Managing Director, Advent India PE Advisors said “Eureka Forbes’s 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”.
“We are excited to partner with the management team of Eureka Forbes Limited and apply Advent’s value creation playbook to build one of India’s home-grown consumer durables champions…” said Mr. Sahil Dalal, Managing Director, Advent India PE Advisors Private Limited.
Eureka Forbes buyout will be the fifth deal by the US equity giant, Advent in the Indian consumer sector after electrical goods firm Crompton Greaves, undergarment firm Dixcy Textiles, DFM Foods and Enamor.
This buyout of Eureka Forbes, will strengthen Advent’s existing portfolio in India and will help the company strengthen its foothold in India’s retail and consumer sectors.
Advent has been investing in India since 2007 and has committed $2.2 billion in 16 companies in India across sectors such as consumer products, financial services, healthcare, industrial and technology.
About Advent International: Advent International is a global private equity investor. The firm has invested $56 billion in over 380 companies in 42 countries, and as of March 31, 2021, had $75 billion in assets under management. It has 14 offices in 11 countries and the firm focuses on investments in five core sectors, including business and financial services; healthcare, industrial, retail and technology.