Crompton Greaves to acquire Butterfly Gandhimathi Appliances for ₹2,076 cr

Crompton Greaves Consumer Electricals Ltd. (Crompton) will acquire the Chennai-based Butterfly Gandhimathi Appliances Ltd. (Butterfly) for a total consideration of ₹2,076.63 crore.

It has signed definitive agreements with certain members of the promoter group of Butterfly Gandhimathi Appliances Ltd to acquire up to 55 per cent stake at Rs 1,403 per equity share aggregating up to ₹1,379.68 crore. Certain Butterfly trademarks in allied and cognate classes from promoter group entities (Trademarks) for a consideration of ₹30.38 crore, says an announcement by Crompton to the BSE.

Crompton will launch the mandatory open offer to the public shareholders of Butterfly for acquiring up to 26 per cent stake in Butterfly for ₹1,433.90 for a total consideration of up to ₹2,076.63 crore, the announcement said.

On February 17, BusinessLine wrote about the Gandhimathi Appliances changing hands and Crompton was in the race to buy it.

On Monday, the scrip of Butterfly Gandhimathi Appliances on the BSE closed at ₹1,391.30, up by 1.01 per cent.

In FY 21, Butterfly reported revenues of ₹870 crore (21 per cent CAGR over FY 17-21). In nine months of FY22, Butterfly reported revenues of ₹806 crore (yoy growth of around 22 per cent).

Butterfly, a household name in the kitchen appliances market, is a leading kitchen and small domestic appliances portfolio that includes mixer grinders, table-top wet grinders, pressure cookers, stainless steel vacuum flasks, LPG stoves and non-stick cookware. It is amongst the top 3 pan-India kitchen and small domestic appliances players, the announcement said.

Shantanu Khosla, Managing Director - Crompton, said, "Crompton has, in its long-term strategic plan, laid out the roadmap to "Extend the Core Product Portfolio". A key step in this roadmap is to strengthen the small domestic appliances category. Butterfly, a brand with a vintage of over five decades, has grown to become a strong brand in South India, with deeply ingrained core values and positive culture amongst its employees.

This acquisition provides concrete support to our long-term vision of becoming a leading pan-India kitchen appliances player. Butterfly's proven channel and brand strategy will form the base for a stronger business led by mixer grinders. This sets up a platform for a complete kitchen play, enabling stronger connection with every home. We are excited by the opportunity ahead and wish to serve our valued customers through a most extensive distribution network and a wider range of competitive and innovative products.

VM Lakshminarayanan, Chairman - Butterfly, said, "As a 50-year-old family and home grown business, we are proud of the growth story our brand has been a part of. Butterfly is a strong brand in South India, and this step will provide an opportunity for the Butterfly brand to achieve pan-India reach.

Crompton is a synergistic fit, and together, there is great potential for powerful complementarity going forward. We have great respect for Crompton and are happy that this brand which has been so close to us, is being entrusted to good hands at the right stage of its future growth journey. We are certain that Butterfly will reach new heights and successes with its instilled values and culture."

Kotak Investment Banking acted as Financial Advisor and Manager to the Open Offer for Crompton, and Khaitan & Co acted as Legal Advisor for Crompton, the announcement said.

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