More reports on: M&A, Personal care
Dabur readies war chest of $250-500 million for acquisitions news
19 September 2009

Dabur India, one of India's leading personal care and food products companies, is planning to expand its operations by acquiring firms in the US, Europe, the UAE and Africa.

"We are focussing on the Middle East and North Africa (MENA) region, mainly the UAE and Africa... and also looking at companies in Europe and the US where we don't have much of a footprint," the company's vice chairman Amit Burman told reporters on the sidelines of a conference 'The India Retail Forum' on Thursday.

"From the internal accruals and the debt we can raise we are looking at a size of $250-$500 million," he added.

The company expects to report 25-per cent growth in a net profit and 22-25 per cent growth in revenue in the current year, aided by the recent acquisition of Fem Care, Burman said, adding that he sees a net profit margins of 3-4 per cent over last year.

Dabur India had earlier acquired a 72-per cent stake in Fem Care Pharma for around Rs203 crore in an all-cash deal. (See: Dabur acquires Fem Care for Rs203 crore)

The skincare segment is expected to contribute 15 per cent to the overall revenue as against 5 per cent last year.

International business, which is growing at about 50 per cent year-on-year, contributes about 15 per cent to the company's topline last year.

Dabur also plans to invest Rs25-50 crore over two years on expanding its retail store network in the country, by adding 4-5 stores this year and 10 stores each year from the next fiscal, he said.

Burman said the company sees huge growth in over-the-counter drugs for diabetes, and heart diseases.

Early this month, Dabur chief executive officer Sunil Duggal said the company is planning to set up a manufacturing facility in Egypt. It already owns one facility in Egypt and one in Nigeria.

"We are in the process of setting up a new manufacturing facility in Egypt to cater to the growing demand in Africa and the neighbouring markets," he said, adding that the proposed unit would make personal care products.

"Dabur already has a sizeable presence in the Middle East and North Africa. We are now looking at expanding our presence to other parts of Africa, starting with East Africa in the first phase, to be followed by West and South Africa," he said.

The company ended the first quarter of 2009-10 with a 29.4 per cent surge in consolidated net profit at Rs91.39 crore, up from Rs70.65 crore a year ago.

The company's consolidated net sales for the first quarter marked a 23-per cent growth to Rs742.66 crore, up from Rs603.98 crore in the same quarter last year.

The growth was driven by robust sales in all its key categories of hair care (hair oils and shampoos), oral care (toothpastes), skin care, health supplements, digestives and foods.

In June, Dabur completed the acquisition of Fem Care Pharma Ltd, a leading player in the women's skin care products market.

Dabur India had earlier acquired 72.15 per cent of Fem for Rs203.7 crore in an all-cash deal.

After obtaining the regulatory approvals, Dabur acquired additional 20-per cent stake for Rs54 crore through an open offer. 


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Dabur readies war chest of $250-500 million for acquisitions