Advent acquires Eureka Forbes at an enterprise valuation of Rs 4,400 crore
Private equity major, Advent International, today signed an agreement with Shapoorji Pallonji Group to acquire a majority stake in Eureka Forbes Ltd at an enterprise valuation of Rs 4,400 crore.
Eureka Forbes Limited, a 100% subsidiary of Forbes & Company Limited will be demerged into a standalone company and then be listed on the BSE Limited. Upon listing of EFL, Advent will purchase up to 72.56% of the company’s then outstanding stock on a fully diluted basis from the SP group. Advent will make an open offer, as per the Sebi Takeover regulations.
The SP group had to sell the company to its commitment to the lenders as per their requirements of one-time restructuring of debt approved by the banks last year. The OTR was approved after the company defaulted on bank loans. The proceeds of the stake will be used to repay the lenders.
“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. We thank the EFL family of employees and stakeholders, and firmly believe they will benefit from this transaction,” said Jai Mavani, Executive Director, Shapoorji Pallonji and Company Private Limited.
“Eureka Forbes’s Aquaguard brand is a household name in water purification, helping safeguard the health and well-being of a large segment of the Indian population. We look forward to working with Marzin Shroff and his team to guide EFL’s next phase of growth and solidify its market leadership” said Shweta Jalan, Managing Director, Advent India PE Advisors Private Limited.
Eureka Forbes was set up in 1931and its parent firm, Forbes nd Company, in fact, traces its origins to 1767 when John Forbes from Scotland started his business in India. Over the years, the company’s management moved from the Forbes family, to the Campbells, to the Tata Group, and finally to the SP Group.
During this period, Forbes and Co went through a series of mergers and demergers, and had to disengage from different businesses. Initially known as Forbes Gokak Limited, the company was renamed as Forbes & Company Limited from October 25, 2007. The SP Group holds 73.85% of the paid-up share capital of FCL.
Post various divestments and business discontinuations, In terms of revenue contribution, on a consolidated basis, EFL (100% subsidiary of FCL) contributes more than 80% to its total operating income.
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