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news 2016-04-05

Godrej brings home US-based hair care brand

Godrej Consumer Products acquires US-based Strength of Nature LLC in Rs 1k crore deal. The acquisition catapults GCPL to become one of the largest players globally, serving the hair care needs of women of African descent.

Godrej brings home US-based hair care brand

Godrej Consumer Products (GCPL) has acquired the US-based Strength of Nature LLC (SON), a leading company of hair care products for women of African descent.

Though the size of the deal was not disclosed, in an announcement on Friday, GCPL said the acquisition is expected to be EPS accretive from year one itself. SON's annualized revenues for calendar year 2015 were $95 million (around Rs 630 crore). Based on a multiple of 1.5, the deal size is understood to be about Rs 1,000 crore, which makes this the second largest acquisition by GCPL, after Megasari in Indonesia.

GCPL chairman Adi Godrej said: "Over the past few years, we have been scaling up our international presence with acquisitions that fit well in our 3 by 3 strategy - a presence in emerging markets in Asia, Africa and Latin America through 3 core categories - hair care, home care and personal care. These strategic acquisitions have strongly aided our growth story. Through them, we have both extended our core businesses and implicitly broadened our presence to a wider canvas."

SON has a significant presence in Africa and the Caribbean and is one of the fastest growing companies in the hair care category for women of African descent. with a range of heritage, category-leading brands in wet hair care, across relaxers, maintenance, styling and shampoos. This includes iconic hair care brands with affordable and innovative products, which have been serving women of African descent across 50 countries. Among them, are African Pride, TCB, Just for Me, Motions and Profectiv MegaGrowth.

Vivek Gambhir, managing director, GCPL, said, "Strength of Nature has a strong track record of serving consumers across Africa and the USA through its robust portfolio of heritage, category leading brands. We look forward to leveraging its strong brand equity for our business. Strength of Nature has a seasoned management team with over 100 years of combined experience in the industry."

The Rs 5,000-crore maker of Godrej No. 1 soap, Good Knight mosquito repellent and Aer car perfumes GCPL believes the acquisition will provide a platform for the company to drive global leadership.

SON complements GCPL's portfolio in Africa, building on its leadership position in dry hair care and hair colours in the region. The acquisition would enables GCPL to forge a stronger presence in the US $ 1.8 billion global wet hair care category.

Considering that the US market is at the forefront of innovation for hair care products and shapes global trends in this space, GCPL believes through SON, it will be able to draw on consumer insights and product expertise that will enable us to launch more innovative products for women of African descent. SON's strong presence in the USA, with deep distribution, additionally provides attractive opportunities for growth. "African American women spend more than three times on hair care than other women in the region. There is also a marked increase in their spending power," said Gambhir.

Mario de la Guardia, Founder and President, SON, said in a statement: "We believe that with the expertise and resources from Godrej, we will be able to transform our business - both to serve our consumers and communities better and tap into new growth opportunities across the world, particularly in Africa. We are now even better positioned to provide our talented team stronger opportunities to learn, grow and contribute to serving our consumers."

Over the last decade, GCPL has made a number of acquisitions across Asia, Africa and Latin America. These include the Darling Group, Tura Megasari, Cosmetica Nacional, Issue Group, Argencos, Keyline Brands, Frika, Rapidol and Kinky.

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