It has entered into an agreement to acquire the majority 51 per cent stake from its shareholder True North (a private equity fund) for Rs 12 crore at face value.
“The enterprise value is estimated to be in the range of Rs 315-325 crore, including debt of Rs 289 crore, which will be backed by the corporate guarantee of Dabur,” it added.
While the remaining 49 per cent shares in Sesa, there will be a share swap for the equity shares.
“The share swap for the equity shares and remaining 49 per cent CRPS in Sesa will be decided at the time of filing the scheme of merger, based on the valuation reports,” it said.
This merger aligns with Dabur’s long-term vision to consolidate its portfolio and tap into newer growth opportunities, said Dabur CEO Mohit Malhotra. Sesa Care, the third largest player in the ayurvedic hair oil category, has a consolidated turnover of Rs 133.3 crore in the financial year 2023-24. “This presents a strategic opportunity for Dabur to expand its presence in the Rs 900 crore ayurvedic hair oil market – a key whitespace in Dabur’s current hair oil portfolio,” said Dabur.
Moreover, the proposed merger brings “substantial revenue and cost synergies”, said the company, already present in the segment with its brands like Dabur Amla Hair Oil, Dabur Vatika and Dabur Almond Hair Oil.
“Dabur’s extensive distribution network, category expertise, and access to key international markets can be leveraged to grow the brand and expand its footprint,” it noted.
The acquisition would be subject to regulatory clearances, the National Company Law Tribunal approval.
“Today’s announcement is the first step, and the merger of Sesa into Dabur is envisaged to be filed with the appropriate authorities over the next few months and shall be subject to the receipt of necessary statutory and regulatory approvals,” it said.
Its Chairman Mohit Burman said Dabur is a market leader in the hair oils category.
“The proposed merger of Sesa will bring to Dabur a premium brand with strong credentials around Ayurveda that will complement our existing portfolio and strengthen our presence in the hair care category,” he said.
Dabur, which had a consolidated revenue from Operations of Rs 12,404 crore in FY24, is looking for acquisition in pursuit of growth.
Last year, Dabur acquired a majority stake in Badshah Masala to enter the branded spices and seasoning market.
