Homegrown private equity firm True North has agreed to acquire a majority stake in Rajkot-based Ban Labs Pvt. Ltd, the maker of Sesa hair oil, in its second buyout transaction within two months.
True North plans to use the Sesa brand equity and build a do-good hair care range focussed on the Ayurvedic segment, the PE firm said in a statement. Sesa oil will be held under new entity Sesa Care.
“We see great potential in the consumer sector and strongly believe Sesa Oil is a remarkable addition to our consumer portfolio,” Shrikrishna Dwaram, partner at True North, said in the statement.
Ban Labs managing director Mauleshbhai Ukani said that, with True North’s support, the company aims to increase its market share, and expand into new products and regions over the next three to five years.
True North didn’t disclose financial details of the transaction. However, the Mint newspaper reported earlier in the day that True North acquired a 75% stake in Ban Labs for around Rs 700 crore ($96 million). The report, which cited a person it didn't name, said Ban Labs founder DK Patel will retain a 25% stake.
The transaction is likely to be completed this month. Deloitte and PwC advised Ban Labs and True North, respectively, for the transaction.
Ban Labs, which was set up in 1966, makes beauty care, personal care and home care products under the brands Sesa, Charm and Glow, Caley and Dr’s Care, according to its website. It has about 400 employees. It runs one factory each in Uttarakhand and Himachal Pradesh.
The company posted net sales of Rs 131 crore for the fiscal year 2016-17, compared with Rs 141 crore the year before. Its net profit declined to Rs 4.65 crore from Rs 6.31 crore, as per VCCEdge, the data research platform of VCCircle.
True North—formerly known as India Value Fund Advisors—has a combined corpus of $2.8 billion (including co-investments) and has invested in more than 40 companies in its 19 years of operations. It invests mainly in the financial services, consumer, healthcare, and technology products and services sectors.
The PE firm had struck its most recent buyout deal in August when it bought Glenmark Pharmaceuticals Ltd’s orthopaedic and pain management business in India and Nepal.
Last December, VCCircle reported that True North marked the first close of its sixth fund at $425-450 million.
The hair oil segment in India has recorded a handful of deals in the past. Consumer goods major Hindustan Unilever Ltd had acquired Kerala-based Mosons Group’s Indulekha and Vayodha hair care brands for Rs 330 crore ($49.8 million then) in 2015. The same year, Emami acquired Kesh King at an enterprise value of Rs 1,651 crore ($259.3 million then).