Dabur India Ltd. has acquired a 72% in Nasik-based Fem Care Pharma, which is famous for its Fem bleach, for Rs 203 crore. Delhi-based Dabur has acquired the entire promoter stake in Fem Care, which is listed in stock markets. The deal has been done at a price per share of Rs 800, and an equity valuation of Rs 282 crore.
The deal has been done at more than a 21% premium to current share price of Rs 656 of Fem Care. Dabur will make an open offer for an additional 20% shares in Fem Care. Dabur's last major acquisition was Balsara’s hygiene and home products business for about Rs 143 crore in 2005.
There has been some consolidation in the Indian FMCG space in past few months. Ealier this month Emami Ltd also completed the acquisition of Zandu Pharamceuticals Works Ltd.
"Acquisition of Fem Care Pharma is in line with our strategy to aggressively expand Dabur's scale of operations and strengthen its presence in the fast moving consumer goods (FMCG) space. This
transaction would give Dabur an entry into the high-growth skin care market with an established brand name 'FEM'. Further, Dabur also has the potential to extend the brand into newer and related skin care categories," said Dr. Anand Burman, Chairman, Dabur India Ltd.
Apart from Fem bleach, other popular brands by the firm are Oxybleach cream, Botanica anti-ageing cream, Stratum colour protecting hair conditioners, SAKA men's bleach and Bambi fabric softeners. Marico Industries and Godrej were also reported to be in race for Fem Care Pharma.
The deal fetches very attractive valuations for Fem Care Pharma. The share prices of the company has increased from Rs 358 to Rs 656 in last month. It reached its 52-week high of Rs 666 today.
Private equity fund Acacia Partners holds about a 9% stake in Fem Care. If Dabur plans to make the open offer also at Rs 800, it may prove to be an attractive exit option in the current market situation.
KPMG Corporate Finance was the financial advisor to the promoters of Fem Care Pharma Ltd and Ambit Corporate Finance was the financial advisor to Dabur India Ltd.