According to reports, Hindustan Unilever, country’s largest maker of consumer products is in advanced talks to acquire hair care brand ‘Indulekha’ owned by Kerala based Mosons Extractions, for around Rs. 500 Cr. HUL is interested in acquiring Indulekha brand, though at a much softer valuation. The deal will help HUL to re-enter the market for hair grooming oils, as the company exited the business in 2006 by selling its coconut oil brand Nihar to Marico Ltd. If the negotiations are successful, HUL will buy all products under the Indulekha brand, including Bringha Ayurvedic Hair Oil, Bringha Selfie Bottle Hair Oil, Coconut Milk Shampoo, skin care oil, skin care cream and Acrot Natural Face Mask.
Several companies including Wipro Consumer Care and Lighting and L Capital Asia Advisors Plc dropped out of the race to acquire Indulekha citing valuation-related concerns. The owners of Mosons Extractions expected Rs.600 crore for the brand. Indulekha, is a new generation ayurvedic solutions business that could gel with HUL’s Ayush services business, which is a relatively small business as compared to the size of its other big brands. The FMCG major has also launched value-added premium specialized hair oils under Dove.
Mosons Extractions had asked investment banker Anand Rathi for the Rs 600-crore sale process. This process has attracted bids from private equity fund TPG Growth and others. TPG is said to have dropped the plan, while others like Carlyle too have gone slow. Anand Rathi is currently advising Mosons on the deal. The Moson Group operates five divisions: Mosons Extractions (hair care & skin care products), Mosons Edibles (edibles from Beevis Pickles & Beevis Masala), Mosons Estates( general contracting firm), Mosons Engineering (ground-level engineering mechanisms), Mosons Everything (an online supermarket).
It will be quite interesting to know why HUL wants to re-enter hair oil market as it exited the business after selling Nihar Brand to Marico in 2006. The maker of Dove shampoos and Lux toilet soaps already has ayurvedic range of health care and personal care under its brand Ayush. In a similar deal, Emami had purchased ayurvedic hair and scalp care brand Kesh King for Rs 1,651 crore in its foray into the fast-growing hair care segment. As per the report, the coconut based hair oil market accounts for 43% of the Rs.8700 crore overall hair oil markets in India.
HUL’s net revenue last fiscal came at Rs 31,000 crore, while reserves and surplus stood at Rs 3,508 crore as of March 31, 2015.