Crompton Greaves out of Kenstar race
, ET Bureau|
Nov 06, 2017, 01.31 AM IST
Homegrown private equity group Everstone will enter in exclusive talks with the promoters of home appliances brand Kenstar to acquire it after Advent International and Temasek-backed Crompton Greaves pulled out of the race, said two people with direct knowledge of the deal.
Last month, ET had reported how Crompton Greaves and Everstone were the only two contenders left to acquire the Videocon Group company that is being valued at around Rs 1,350-1,400 crore. While Crompton Greaves had bid at Rs 1,400 crore, Everstone Capital has offered Rs 1,300 crore for the company.
“Crompton Greaves Consumer Electricals has pulled out their bid to acquire the company. Everstone Capital is the lone contender now,” said one of the persons with direct knowledge of the deal.
“The promoters-Dhoot family will sign exclusivity with Everstone Capital soon.”
The deal that has been running for a year now has seen many suitors such as Orient Electric, Symphony, Havells, Voltas, among others.
Started in 1995, kitchen and home appliances brand Kenstar is part of the Dhoot family owned Videocon Group. The company sells air conditioners, air coolers, mixer grinders and electric kettles and booked a loss of Rs 26.42 crore on the back of Rs 1,939.50 crore of operating income in the financial year ended March 31, 2015. Kenstar commands a healthy market share in different segments and has a strong dealer network.
The promoters initially expected a value of about Rs 1,800-2,000 crore, however, since no bidder was ready to pay the price, the tag has been brought down to Rs 1,500-1,600 crore. Investment bank Credit Suisse is advising the Dhoot family on the stake sale.
Emailed query sent to the spokesperson of Everstone Capital did not elicit any response. When contacted, the spokesperson for Videocon declined to comment.
Weighed down by a debt pile of Rs 43,000 crore, the group has been forced to consider sale of some of its assets to deleverage its balance sheet.
Last year, the lenders put pressure on the promoters to sell its Mozambique oil assets to state-run Oil and Natural Gas (ONGC) for $2.475 billion and its direct-to-home business to Dish TV.
According to a July 2017 report by Indian Brand Equity Foundation, in 2015, revenue from consumer durables sector in India stood at $9.7 billion, which increased to $12.5 billion in FY16.
The consumer durable market is expected to grow at CAGR of 13% from FY 05 to FY 20 with around two third of the total revenue being generated from urban population and rest is generated from rural population.
Companies such as Godrej group, Onida Electronics, Blue Star and Videocon Industries are a few of the major domestic players operating in India consumer durable market. Private equity funds are upbeat about the consumer durables sector in India.
In 2015, Advent International and Temasek took over the company for Rs 2,000 crore. Everstone Capital has put more than $2 billion across vehicles in Indian market. Some of its portfolio companies include, Burger King, Servion, Faces, Regen, YouLookGreat, Modern Foods, Hinduja Leyland Finance and Ozone Overseas among many others.
Last month, ET had reported how Crompton Greaves and Everstone were the only two contenders left to acquire the Videocon Group company that is being valued at around Rs 1,350-1,400 crore. While Crompton Greaves had bid at Rs 1,400 crore, Everstone Capital has offered Rs 1,300 crore for the company.
“Crompton Greaves Consumer Electricals has pulled out their bid to acquire the company. Everstone Capital is the lone contender now,” said one of the persons with direct knowledge of the deal.
“The promoters-Dhoot family will sign exclusivity with Everstone Capital soon.”
The deal that has been running for a year now has seen many suitors such as Orient Electric, Symphony, Havells, Voltas, among others.
Started in 1995, kitchen and home appliances brand Kenstar is part of the Dhoot family owned Videocon Group. The company sells air conditioners, air coolers, mixer grinders and electric kettles and booked a loss of Rs 26.42 crore on the back of Rs 1,939.50 crore of operating income in the financial year ended March 31, 2015. Kenstar commands a healthy market share in different segments and has a strong dealer network.
The promoters initially expected a value of about Rs 1,800-2,000 crore, however, since no bidder was ready to pay the price, the tag has been brought down to Rs 1,500-1,600 crore. Investment bank Credit Suisse is advising the Dhoot family on the stake sale.
Emailed query sent to the spokesperson of Everstone Capital did not elicit any response. When contacted, the spokesperson for Videocon declined to comment.
Weighed down by a debt pile of Rs 43,000 crore, the group has been forced to consider sale of some of its assets to deleverage its balance sheet.
Last year, the lenders put pressure on the promoters to sell its Mozambique oil assets to state-run Oil and Natural Gas (ONGC) for $2.475 billion and its direct-to-home business to Dish TV.
According to a July 2017 report by Indian Brand Equity Foundation, in 2015, revenue from consumer durables sector in India stood at $9.7 billion, which increased to $12.5 billion in FY16.
The consumer durable market is expected to grow at CAGR of 13% from FY 05 to FY 20 with around two third of the total revenue being generated from urban population and rest is generated from rural population.
Companies such as Godrej group, Onida Electronics, Blue Star and Videocon Industries are a few of the major domestic players operating in India consumer durable market. Private equity funds are upbeat about the consumer durables sector in India.
In 2015, Advent International and Temasek took over the company for Rs 2,000 crore. Everstone Capital has put more than $2 billion across vehicles in Indian market. Some of its portfolio companies include, Burger King, Servion, Faces, Regen, YouLookGreat, Modern Foods, Hinduja Leyland Finance and Ozone Overseas among many others.
