Asian Paints has, today, entered into definitive agreements to acquire 49% stake in Obgenix Software Private Limited (popularly known by the brand name "White Teak") from the promoters, for a consideration of approximately Rs. 180 crores, along with an earn out upto a maximum of Rs. 114 crores, payable after a year, subject to achievement of mutually agreed financial milestones.
It is also agreed to acquire the remaining 51% stake in White Teak in a phased manner, wherein 11% stake would be acquired in FY 2023-24 for a consideration based on achievement of certain financial milestones, with maximum consideration of Rs. 66 crores; and the remaining 40% stake would be acquired in FY 2025-26 for a consideration based on achievement of certain financial milestones, with maximum consideration of Rs. 360 crores.
White Teak is a private limited company, established in 2016 by Silicon Valley tech entrepreneurs Mr. Pawan Mehta and Mr. Gagan Mehta, and is engaged in the business of decorative lighting products and fans. Its tech-enabled web platform, www.whiteteak.com, is one of the strongest platforms offering customers an extensive range of decorative lighting products and fans, further supplemented by its excellent store network across many key urban cities in India. It has been at the forefront of creating cutting-edge designs and ideas in this space and bringing international standard design and quality to customers. White Teak has been able to harness its strengths, scaling up the business in a strong manner, registering revenues of Rs. 18 crores in the quarter ended December 2021.
Asian Paints, with its vision of becoming the most inspirational home décor brand empowering the consumer to create her dream homes, is extremely happy to partner and associate with White Teak, taking forward its transition from a 'share of surface' within the home to 'share of space'. Lighting is an integral element of home décor and Asian Paints intends to leverage the expertise of White Teak and its promoters, along with its own experience in offering inspirational décor to home-owners, to further strengthen its foray in the home décor space. Decorative lighting market in India is about Rs. 1200 crores presently and is growing at about 18-20% annually. It is currently dominated by the unorganized sector, mostly through imports from China. With this partnership, Asian Paints, along with White Teak, intends to gain a sizeable presence in this market.
Both the promoters of White Teak would continue to lead the business. Mr. Pawan Mehta would continue to be the Chief Executive Officer and Mr. Gagan Mehta would be the Chief Operating Officer of White Teak.
"White Teak offers us an unique opportunity to further strengthen our foray in the home décor space by capitalizing on its capabilities in the designer and decorative lighting products, and thus enhances the overall value proposition of our home décor offerings to the consumers. This alliance would also help Asian Paints to leverage various categories of Home Décor on the online digital space and start exploding the e-commerce space in future", commented Mr. Amit Syngle, MD & CEO of Asian Paints Limited.
"We are extremely happy to partner with Asian Paints, a well-established brand with strong customer connect, and look forward to taking the White Teak business to greater scale, driving on the synergistic opportunities that Asian Paints offers", quoted Mr. Pawan Mehta, Founder & CEO of White Teak.
Shares of Asian Paints Limited was last trading in BSE at Rs. 3081.75 as compared to the previous close of Rs. 3080.15. The total number of shares traded during the day was 42462 in over 4341 trades.
The stock hit an intraday high of Rs. 3129.00 and intraday low of 3066.75. The net turnover during the day was Rs. 131994283.00.