Godrej Consumer Products on Thursday said it has signed an agreement to acquire Raymond’s consumer care business, which includes sexual wellness brand KamaSutra and men’s grooming brand Park Avenue, in an all-cash deal for Rs 2,825 crore.
The deal is expected to be completed by May 10, 2023, Godrej Consumer Products Limited, a part of Godrej group, said in a regulatory filing to stock exchanges.
It is a “slump sale” deal. As part of the agreement, Godrej Consumer Products will pay a lump sum amount of Rs 2,825 crore for the acquisition.
“This acquisition allows us to complement our business portfolio and growth strategy with under-penetrated categories that offer a long runway of growth,” said Sudhir Sitapati, Managing Director and CEO of Godrej Consumer Products Ltd.
Raymond is a leading player in the deodorants and sexual wellness categories with brands like Park Avenue, KamaSutra, KS Spark and Premium. “These categories have the potential to deliver double-digit multi-decade growth given the low per capita consumption in India compared to similar emerging markets,” Sitapati said.
The per-capita consumption of deodorants in India is 0.4x that in Indonesia, 0.05x that in Brazil and 0.04x that in the USA.
“We look forward to building on this potential by unlocking the significant integration synergies with our business,” he added.
Share price Raymond Ltd surged 6.55 per cent to Rs 1717.35 on the BSE, while Godrej Consumer Products Ltd dipped 2.35 per cent to Rs 953.20.
In a separate statement Raymond Limited said it has decided to demerge its lifestyle business to Raymond Consumer Care Ltd (RCCL) to create a listed entity with pure play B2C focused Lifestyle Business.
The move to demerge the lifestyle business from Raymond Limited will enable the business to be net debt free and will become an independently listed entity, Raymond said.
Post demerger of the lifestyle business, Raymond Ltd would primarily be a listed real estate company with investments in engineering and denim business. Raymond Limited and Raymond Lifestyle Business will be the two listed entities of the group post demerger.
“We have taken an affirmative action by demerging our lifestyle business that will be a separate listed entity with zero net debt,” said Gautam Hari Singhania, Chairman and Managing Director of Raymond Limited.
RCCL will retain its condom manufacturing facility and will continue to do contract manufacturing in Aurangabad, Maharashtra for both domestic and international markets.
Going forward, the lifestyle business that now moves under RCCL will be listed and each shareholder of Raymond Limited will get 4 shares of RCCL for every 5 shares held based on the swap ratio suggested by independent valuer KPMG and approved by the Board of Directors of Raymond Limited.