Eureka Forbes acquired by Advent for ₹4,400 crore
- ByStartupStory | September 20, 2021
Eureka Forbes Ltd (EFL) is acquired by Advent International for an enterprise value of Rs 4,400 crore. After a long wait, the Shapoorji Pallonji Group has closed the sale process of its consumer durables business under the Eureka Forbes label by picking the American private equity fund Advent International’s Rs 4,400-crore offer for a 72 percent stake. The sale process, which began in November 2019, will help SP Group curtail the debt load and focus more on the flagship construction and engineering business under Afcons.
According to Forbes & Company’s annual report disclosures, EFL had gross debt of Rs 285 crore for the year ending March 2021, while cash & bank balance was Rs 23 crore and liquid investment in mutual fund units was Rs 86.2 crore. If these are adjusted from the enterprise value (which is equity plus debt plus cash & bank balances), the equity value for EFL would translate to around Rs 4,250 crore. Consequently, Shapoorji Pallonji Group may end up getting around Rs 3,100 crore for its 72.56 percent stake in the standalone listed Eureka Forbes.
Eureka Forbes Ltd will be separated from the parent and listed on BSE.“Upon listing of Eureka Forbes, 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 thereafter make an open offer in compliance with applicable regulations,” a joint statement by the companies on Sunday said.
Eureka Forbes has a presence in water purification, vacuum cleaning, and health and safety solutions space.
For Advent, which has been investing in India since 2007, Eureka Forbes will be its fifth buyout in the consumer sector. The PE firm had earlier made four consumer investments, including Crompton Greaves Consumer Electricals, Dixcy Textiles, Enamor, and DFM Foods.
Over the past 14 years, Advent 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.
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