Mid-market consumer-focused private equity firm Lighthouse Advisors Pvt. Ltd has invested Rs 160 crore ($22 million) in mattress company Duroflex Pvt. Ltd, which has a strong presence in south India.
The company, founded in 1963 by the late PC Mathew, will use the funds for expansion, said Duroflex in a statement. The company also plans to add over 500 exclusive business outlets, Duroflex added.
Duroflex manufactures a wide range of mattresses and polyurethane foam products in its five manufacturing facilities located in Tamil Nadu, Telangana and Kerala. Duroflex’s products sell at more than 3,000 retail outlets across south India. The company is in the process of expanding in west and east India, Duroflex said.
"We have been able to build a strong brand in south India on the back of consistent quality and would want to multiply efforts to replicate similar success in our new markets," said Mathew Chandy, managing director, Duroflex.
ICICI Securities acted as the sole financial adviser to Duroflex for the fundraising.
The company expects to register a revenue of over Rs 450 crore for the current financial year, Duroflex said. It had clocked net sales of Rs 247.5 crore for the financial year 2016-17, up from Rs 203 crore for the previous year, according to VCCEdge (www.VCCEdge.com), the data and research platform of News Corp VCCircle. Its net profit during the period stood flat at Rs 8.2 crore.
Other major players in the mattress industry are Sheela Foam Ltd, which makes products under the Sleepwell brand, and Kurlon Ltd.
Kurlon had attracted private equity interest in 2015 when Motilal Oswal Private Equity Advisors Pvt. Ltd, an arm of Motilal Oswal Financial Services Ltd, invested Rs 90 crore ($13.5 million) in the company.
Sheela Foam went public in 2016.
In March, VCCircle reported that the private equity firm marked the first close of raising money for its third India-dedicated fund at $150 million (Rs 974 crore). The fund was aiming to achieve final close at $200 million.
In June, VCCircle reported that the private equity firm struck its debut deal from the latest fund, when it led a Rs 143 crore ($21 million) investment in Tynor Orthotics Pvt. Ltd, which makes support devices for body parts.
In September, VCCircle reported that the fund inked its second deal, investing Rs 113 crore to acquire a stake in beauty retailer Nykaa from existing private equity investor TVS Capital Funds.
Lighthouse plans to bet on 8 to 10 companies from the latest fund and the average ticket size will be between Rs 125 crore and Rs 200 crore, Sachin Bhartiya, partner, had told VCCircle.