Dabur expands haircare portfolio with Sesa Care acquisition

New Delhi: Dabur India Ltd will acquire a 51% stake in hair care company Sesa Care Pvt. Ltd for an enterprise value of ₹315-325 crore.

Dabur will pay ₹12.6 crore to True North, a private equity fund and the haircare company's existing owner, to acquire 51% of the total paid up cumulative redeemable preference shares (CRPS) of Sesa. The FMCG major will also assume Sesa's debt of ₹289 crore, which will be backed by a corporate guarantee of Dabur

As part of the merger, shares of Dabur will be issued in exchange for the shares and the remaining 49% CRPS of Sesa Care.

The merger is expected to be completed in 15 to 18 months, subject to approvals, Dabur said in a regulatory filing. Ambit Private Ltd was the advisor to the transaction.

This marks Dabur’s second acquisition in the last two years. In 2022, it acquired a 51% stake in spice maker Badshah Masala Pvt Ltd for ₹587.52 crore. 

Wednesday’s announcement will help Dabur expand its presence in the ₹900 crore ayurvedic hair oil market.

“The proposed merger brings substantial revenue and cost synergies. Dabur's extensive distribution network, category expertise, and access to key international markets can be leveraged to grow the brand and expand its footprint,” the company said in a filing to the exchanges.

Dabur sells hair oils under Dabur Amla, Vatika and Dabur Almond brands. The move will further strengthen its position in the value-added hair oil market and pit it against competitors such as Hindustan Unilever Ltd’s Indulekha, Emami’s Kesh King and Marico’s Parachute. 

In 2015, Emami, a Kolkata-based consumer goods company, acquired Kesh King, an ayurvedic hair and scalp care brand, for ₹1,651 crore. 

Sesa Care sells its flagship Sesa Ayurvedic Oil in addition to shampoo, and conditioners. In 2018, True North acquired a majority stake in Rajkot-based Ban Labs Pst Ltd., the maker of Sesa hair oil. 

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Dabur on Wednesday reported a 17.5% year-on-year fall in its consolidated net profit (attributable to owners of the holding company) to ₹425 crore for the quarter ended September. Its consolidated revenue from operations stood at ₹3,028.59 crores , down 5.5%.

In fiscal 2024, Sesa Care reported a turnover of ₹133 crore. The company, which operates a manufacturing facility in Himachal Pradesh, has 11% share in the hair oil market in the country, per the regulatory filing by Dabur. 

Sesa also has a wholly owned subsidiary in Bangladesh under Sesa Care Bangladesh Pvt. Ltd. Upon completion of the merger, the business will become a wholly-owned subsidiary of Dabur.

 “This merger aligns with our long-term vision to consolidate our portfolio and tap into newer growth opportunities. By integrating Sesa's range of Ayurvedic hair care products and expertise with Dabur’s extensive distribution network, category expertise, and access to key international markets, we aim to grow brand Sesa and deliver enhanced value to our stakeholders in addition to revenue and cost synergies,” Dabur chief executive officer Mohit Malhotra said. 

Dabur will continue to actively look for additional targets in both traditional and new age areas, Abhinav Dhall, executive director and group head of corporate strategy at the company said. 

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