Mumbai: Godrej Consumer Products Ltd has signed an agreement to acquire the South African hair color business of Rapidol, UK, as well as its subsidiary Rapidol International. The two posted a combined turnover of 52 million South African rand (approximately Rs 33 crore) in 2005.
The acquisition, proposed through a 100 per cent cash deal, is subject to regulatory approvals.
The acquisition will open a large ethnic hair color market to the company via a profit making company, Godrej Consumer Products said. This will add to the company's top line and bottom line, which in turn will enhance stakeholder value, it added.
Rapidol South Africa owns Inecto, an internationally known brand, which enjoys a reputation of being a safe and affordable hair colourant with consumers across South Africa and the African continent. With the acquisition of the Inecto and Sofelene trademarks, Godrej Consumer Products would also gain larger territorial rights over the brand equities. It will also provide a launch pad for the Godrej products in African countries.
Inecto is sold across Angola, Zambia, Mozambique, Tanzania, the Democratic Republic of Congo, Swaziland, Ghana, Gabon, Botswana, Namibia, Lesotho, Zimbabwe, Mauritius, Seychelles and Madagascar mainly through the cash and carry route.
Additionally Godrej Consumer proposes to introduce some of its own products like FairGlow and Evita hair colourants in the African market.
Commenting on the acquisition, Adi Godrej, chairman and managing director of the company, said, "This transaction is consistent with our endeavor to build a strong personal and household care business both in India and across the globe, especially in hair colors. Rapidol South Africa is a profit making company that manufactures and markets premium hair colourants in the African market."
He added, "The acquisition of the Inecto and Sofelene brands will widen our portfolio of hair colourant and hair care offerings and give us access to the large and growing African market. We also propose to introduce some of our own products there, via Rapidol's established distribution network. This is our second international acquisition in less than a year and reflects our aggressive growth focus. We will continue to pursue value enhancing inorganic and organic growth opportunities both in India and overseas."
The company expects to drive further value from the transaction by leveraging its high quality, low-cost manufacturing skills.