The Hindu Business Line : Dabur buys 3 Balsara group cos for Rs 143 cr

This acquisition will give the company access to oral care brands of Balsara - Babool and Meswak - besides household products including Odonil (air freshener), Odopic (dish washer), Sanifresh (toilet cleaner) and Odomos (insect repellent).

As per the deal, which was approved by the board of directors of DIL, it will acquire 99.4 per cent stake in Balsara Hygiene Products, 100 per cent in Balsara Home Products and 97.9 per cent in Besta Cosmetics.

The company will seek shareholder approval for the deal by April. Till then, it will assume management control at Balsara.

The acquisition is being funded largely through internal accruals with only Rs 23 crore of the entire amount being sourced through debt.

"Balsara has a strong range of brands that fit in well with our brand architecture and growth plans in India and abroad. Its range of oral care products will fit in largely under the Dabur brand name, further strengthening our existing position as the third largest player in the oral care market in India," DIL CEO Mr Sunil Duggal told newspersons.

On whether the company's appetite for acquisitions was satiated, he said that DIL was open to more acquisitions in areas where the company already operates - personal care, healthcare, foods and now household care.

According to him, Dabur expects 10 per cent growth immediately in revenues after this acquisition.

Balsara's businesses recorded sales of Rs 199.6 crore in 2003-04 with losses of about Rs 8 crore, Mr Duggal said, adding that the three acquired companies will become subsidiaries of DIL. These could be merged into DIL at a later date.

Pointing out the synergies with DIL, he said that this acquisition brings not only a complementary brand portfolio but economies of scale in marketing, sales and distribution.

Balsara has three manufacturing sites at Kanpur, Silvassa and Baddi. Mr Duggal said that there are no plans to rationalise manpower at Balsara companies, where the total headcount is 600.

DIL would be making "significant" investments in the acquired brands but Mr Duggal declined to quantify these.

The exclusive financial advisor to this deal was the Mumbai-based Ambit Finance, while due diligence was carried out by PriceWaterhouse, AZB & Partners and Accenture.

In addition to the oral care and household care businesses, Balsara operates in the high-growth private label and herbal extracts and complexes businesses, but the fate of these two businesses remains could not be ascertained.

R.C. Bhargava joins DIL board

At its meeting today, the board of directors of DIL appointed Mr R.C. Bhargava, former Managing Director of Maruti Udyog, as independent director in place of Mr Ajay Bahl.

Mr P N Vijay, Mr Stuart Purdy and Mr Gaj Singh are the other three independent directors of DIL. The board has two executive directors - Mr P.D. Narang and Mr Duggal - besides four promoter directors.

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