Global private equity investor Advent International has signed a definitive agreement with Shapoorji Pallonji Group to acquire a majority stake in Eureka Forbes Ltd (EEL) at an enterprise value of ₹4,400 crore.

EFL, a 100 per cent subsidiary of Forbes & Company Ltd, will be demerged into a standalone company and then be listed on the BSE. Upon listing of EFL, Advent will purchase up to 72.56 per cent of the company’s outstanding stock on a fully diluted basis from SP Group

Advent will then make an open offer in compliance with applicable regulations. The transaction is subject to closing conditions and receipt of relevant statutory and regulatory approvals.

Monetising assets

BusinessLine had earlier reported that SP Group is looking to monetise its assets and may sell its stake partly or fully in at least three of its group companies, including Eureka Forbes, Sterling and Wilson Solar and Afcons Infrastructure, as part of the one-time debt restructuring package being discussed with the lenders. The company plans to raise about ₹10,332 crore through this asset sale.

“We are pleased that Eureka Forbes Limited, a jewel in the Shapoorji Pallonji Group has found a new home with Advent while at the same time unlocking value for shareholders. This transaction also reflects our stated objective and strategy of significant de-leveraging and focusing on our core competencies and businesses,” said Jai Mavani, Executive Director, Shapoorji Pallonji and Company Private Ltd.

Eureka Forbes has a presence in water purification, vacuum cleaning and other emerging categories through its long-established power brands such as Aquaguard. With retail presence in over 20,000 outlets, and a fast-growing e-commerce channel, it has over 20 million customers visiting a kitchen every second.

“Having delivered innovative products and solutions for our ever-growing customer base, we are now buoyant about the opportunity to unlock further growth and are excited to embark on this new journey with the promise of a better tomorrow.” said Marzin R Shroff, Managing Director & CEO, Eureka Forbes Limited.

Advent has been investing in India since 2007 and opened its Mumbai office in 2009. Over the past 14 years, the firm has invested or committed $2.2 billion in 16 companies with headquarters or operations in India across sectors such as consumer products, financial services, healthcare, industrial and technology.

“We are excited to partner with the management team of Eureka Forbes Limited and apply Advent’s value creation playbook to build one of India’s home-grown consumer durables champions, which will continue to be known for innovative products and best-in-class customer service” said Sahil Dalal, Managing Director, Advent India PE Advisors Private Limited.

In India, Advent has made four consumer investments, including Crompton Greaves Consumer Electricals; Dixcy Textiles; Enamor; and DFM Foods. Eureka Forbes Limited will be Advent’s fifth buy out in the consumer sector.

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