Mumbai-based consumer products and services company Marico Ltd has acquired leading South African hair styling brand Isoplus for about Rs 36 crore ($5.6 million) in a bid to complete its ethnic hair care portfolio in the country.
The acquisition was made through the FMCG major’s wholly-owned step-down subsidiary, Marico South Africa Pty. Ltd, and will include Isoplus’ manufacturing facilities, working capital and intellectual property rights. The company was owned by JM Products SA Pty and Mary L Harris.
According to a press statement by the homegrown company, best known for its Parachute hair oil and Saffola cooking oil, the deal is expected to be fully consummated by November.
With a value market share of 27%, Isoplus claims to be the market leader in South Africa’s styling segment. Oil sheens and styling gels are the main contributors to the brand’s top line. “This bolt-on acquisition plugs a critical gap in Marico’s portfolio in the ethnic hair care space in South Africa,” said Saugata Gupta, managing director, Marico.
In 2016, JM Products had clocked a sales turnover of 62 million South African Rand ($4 million).
Marico is currently present in South Africa through brands such as Caivil, Black Chic, Just for Kids, Hercules and Medi-Pac. The Indian FMCG company is among the key players in the aftercare maintenance, chemical treatments and hair colour segments.
Marico had been quite active in acquiring lesser peers, both in India and overseas, for almost eight years starting 2005, but had not been part of any major takeovers after the 2012 acquisition of Paras Pharmaceuticals from Reckitt Benckiser.
However, over the past one year the company had been scouting for acquisition opportunities as part of his plans to revive its M&A play. In September 2015, it had appointed Pankaj Saluja as chief of strategy, M&A and new business opportunities.
Earlier this year, the company had also announced its foray into the male grooming market by picking up a stake in Ahmedabad-based Zed Lifestyle Pvt. Ltd, which owns Beardo.
Marico was not only vying for inorganic growth opportunities in existing markets, but also in other regions of East Africa and Southeast Asia. It is currently present in South Africa and Egypt in Africa, Malaysia and Vietnam in Southeast Asia, besides India and Bangladesh, and a few West Asian nations.
Marico had embarked on its global inorganic growth journey with Bangladesh in 2005 and 2006, with the acquisition of two soap brands, Manjal and Aromatic. Around the same time, it had also sealed its first Africa deal by picking up two hair care brands – HairCode from The Pyramids Group and Fiancee from Ready Group – in Egypt.
In 2010, Marico had bought a Colgate-Palmolive brand in Malaysia, and in the following year, it had struck a deal in Vietnam. Its last overseas M&A deal was in 2011, when it acquired healthcare brand Ingwe from South Africa’s Guideline Trading.
In 2012, the company had inked a deal to buy the personal care business of Paras Pharmaceuticals from UK consumer goods giant Reckitt Benckiser. Interestingly, Marico had previously pursued Paras Pharma for a bigger buyout, but Reckitt Benckiser had clinched that deal and later put the non-core assets of Paras Pharma on the block.