Emami lands a cool deal with Dermicool

Meenakshi Verma Ambwani | | Updated on: Mar 26, 2022

Buys prickly heat powder and cool talc brand from Reckitt for ₹432 crore

FMCG major Emami on Friday said that it has acquired prickly heat powder and cool talc brand Dermicool from Reckitt for a total consideration ₹432 crore excluding taxes and duties. The company said the deal is funded through internal accruals and is subject to customary closing conditions.

The FMCG company already has a presence in the category through its brand Navratna Cool Talc and it expects to realise synergetic benefits and cost optimisation through this strategic acquisition.

Market leadership

Harsha V Agarwal, Director, Emami, told BusinessLine,” This acquisition of Dermicool has a strong strategic fit for us and offers great synergy with our existing business. Dermicool has a market share of about 20 per cent and combined with Navratna Talc, we will gain market leadership in this category.” As per industry estimates the prickly heat talc powder is pegged at about ₹750-800 crore.

“In pre-Covid times, the category was growing at a CAGR of 10-12 per cent. With the two pandemic waves coming in during the peak summer season, the category did see some impact. Now with increasing global warming and soaring summer temperatures, we see a strong growth potential for the category.” Agarwal added.

Other strategic buys

The homegrown FMCG major has been focusing on inorganic growth strategies not only in its existing businesses has also been focusing on other strategic buys in categories that have high growth potential.

Zandu, Kesh King and German brand Creme 21 are some of the brands that it has acquired in the past few years. In recent times, Emami has also invested in new-age brands such as The Man Company, Brillare and most recently TruNativ.

Dermicool was among the OTC brands that Reckitt (formerly known as Reckitt Benckiser) had bagged after it had acquired Paras Pharmaceuticals in 2011. The brand is known for its high consumer connect campaigns with the jingle ‘ Aaya mausam thande thande Dermicool ka’.

Abneesh Roy, Executive Director-Institutional Equities, Edelweiss Securities said this acquisition will further fortify Emami’s presence in the prickly heat powder and cool talc segment as its market share in the category now moves up to 45 per cent.

Published on March 25, 2022
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