Sheela Foam Limited to acquire Kurlon Enterprise Ltd

Sheela Foam Limited in its Board meeting held on 17th July 2023 has approved the acquisition of Kurlon Enterprise Limited (KEL) and House of Kieraya Private Limited (Furlenco).

KEL in engaged in the business of manufacturing and marketing of foam-based and coir-based home comfort products across the "Sit and Sleep" solution categories like mattress, furniture cushions, pillows and coverings.

The acquisition will help the Company to:

a. consolidate the existing fragmented market of mattresses and foam-based products;

b. diversify customer base - the Company is the leader in northern and western India whereas KEL has strengths in southern and eastern regions of India. This acquisition will help the Company extend a pan-India footprint.

c. complementary distribution network - the Company functions mainly through exclusive distribution networks (EBOs) whereas KEL is strong in multiple distribution network (MBO). This acquisition is expected to provide the Company with a robust distribution network; and

d. Production efficiencies and cost savings - the Company and KEL have many complementary facilities which will help it to serve customers from lesser distance and improve both serving and reduce costs. The transaction also has manufacturing synergies.

The Company is acquiring 94.66% of KEL's share capital at an equity valuation of INR 2150 crores, subject to customary adjustments for net working capital, debt and surplus cash, if any.

Shares of Sheela Foam Limited was last trading in BSE at Rs. 1188.10 as compared to the previous close of Rs. 1121.75. The total number of shares traded during the day was 43421 in over 5561 trades.

The stock hit an intraday high of Rs. 1253.35 and intraday low of 1120.05. The net turnover during the day was Rs. 52177004.00.

Source : Equity Bulls

Keywords

SheelaFoam INE916U01025 Acquisition KurlonEnterprise Furlenco