Dabur India, the country's fourth-largest FMCG company and the largest ayurvedic medicine manufacturer, yesterday agreed to buy Namaste Laboratories, a US-based hair care company, for Rs446 crore ($100 million).

The acquisition, which is being made through Dabur's US-based wholly-owned subsidiary Dermoviva Skin Essentials Inc, is expected to close by the end of 2010.

Blue Island, Illinois-based Namaste Laboratories, founded by Gary Gardner in 1996 is a personal care company specialising in hair care products.

It makes several products to treat hair concerns such as hair loss, damaged hair, thinning hair, dry and itchy scalp under its Organic Root Stimulator brand.

Although the company name is a common greeting in India, it has no presence in the country, but its main markets are the Caribbean, Africa, Middle East, certain parts of North America and a small presence in Europe.

For 2009, the company reported revenues of $90 million, 70 per cent of which came from the US market, while the rest came from other regions, mainly Africa. Its net income was $12.5 million.

Under the deal, Dabur will pay Rs.446 Crore in cash to buy Namaste Laboratories and its three subsidiaries and an additional Rs177 crore ($40 million) if it is able to double its sales in the next four years.

Dabur will retain Gardner as CEO to run Namaste operations along with the sales team, including broker representatives, and will not change the existing relationships with retailers, wholesalers, distributors and suppliers.

"This acquisition is in line with our strategy to build a global presence in the international consumer goods market," said Dabur chairman Dr Anand Burman.

Dr Burman explained, "Namaste has a complementary product mix that can be easily integrated with Dabur and will also serve as a gateway to the US market for our portfolio of consumer products. This transaction will also enhance our profitability, increase stakeholder value and substantially add to Dabur's already strong presence in Africa, serving as one of the key pillars in strengthening our position in the African continent."

This is Dabur's first acquisition in the US and its second overseas acquisition after it acquired Hobi Kozmetik Group, a leading personal care products company in Turkey in July 2010, for $69 million (about Rs324 crore), to expand its markets in West Asia and North Africa. (See: Dabur buys Turkish firm Hobi Kozmetik for $69 million)

Dabur had recently acquired Fem Care Pharma, its second domestic acquisition after the buy-out of Balsara's Hygiene and Home products businesses.

With 2009 revenues of over Rs3416 crore ($750 million) and market capitalisation of over Rs16,000 crore ($3.5 billion), Dabur had readied in June 2010 a $250-$500 million war chest for overseas acquisitions.

The company's aim is to increase its footprint in the Middle East and Africa and enter the European and the US market where it does not have a presence.

Indian personal care products companies are looking at overseas acquisitions to bolster their global footprint. Companies like Godrej, Wipro and the Isssue Group have snapped up companies in South Africa, Singapore, Nigeria, Argentina and Indonesia.