MUMBAI/CHENNAI: American private equity firm Advent International is nearing a deal to acquire Eureka Forbes, India’s largest maker of water purifiers and vacuum cleaners owned by the Shapoorji Pallonji (SP) Group. The transaction is set to value Eureka Forbes at about Rs 5,000 crore, said people with knowledge of the matter.
SP had appointed Standard Chartered Bank to explore strategic options for Eureka Forbes, which is being demerged from the publicly listed Forbes & Co. The demerger is pending approval from the National Company Law Tribunal. After this, the consumer appliances unit would be sold to Advent. When contacted, both Advent and SP offered no comment.
The transaction will help SP pare its Rs 20,000-crore total debt and sharpen focus on its core construction business. Of the total debt, about Rs 12,000 crore is under the Reserve Bank of India’s Covid relief scheme. This scheme gives SP time till 2023 to clear the dues, but it plans to repay at least half of it in the coming months. And the divestment of Eureka Forbes is in that direction. Besides Eureka Forbes, SP is looking to sell Sterling & Wilson Solar, Afcons Infrastructure and some real estate assets.
Advent was competing with investment firm Warburg Pincus and Swedish home appliance manufacturer Electrolux to acquire Eureka Forbes. Both declined to raise their offers, paving the way for the impending deal with Advent. Interestingly, Eureka Forbes, one of the world’s largest direct sales companies, was promoted by Electrolux along with the Tata Group in the early 1980s. The Swedish major exited the joint venture as it had got out of direct marketing business in several countries.
Advent’s move follows its exit from home appliance maker Crompton Greaves Consumer Electricals. The Boston-based fund has been investing in India since 2007. In this time, it has deployed more than $1.7 billion in a dozen Indian companies, according to its February 7 statement.
Eureka Forbes, with a footprint in over 35 countries, has a customer count of 20 million. Some years ago, it acquired Switzerland’s Lux, which helped Eureka Forbes to spread its wings in foreign locations. It is a leader in the vacuum-cleaning category in India and its flagship brand Aquaguard too has a dominant share of the water purifier market in the country. Riding on the hygiene and health wave on the back of the pandemic, it recently launched Forbes Coronaguard, a virus disinfectant device, and robotic vacuum cleaners.