Marico buys personal care biz from Reckitt

Consumer products manufacturer Marico on Wednesday acquired the personal care brands of Paras Pharmaceuticals from the U.K. consumer products giant Reckitt Benckiser (RB) for an undisclosed sum. The transaction will see Marico acquire brands such as Set Wet, Livon, Zatak and certain other personal care brands now owned by Reckitt Benckiser.

Reckitt Benckiser had acquired these brands from Paras Pharmaceuticals in a deal completed in April, 2011, for Rs.3,260 crore.

The latest transaction envisages transfer of all key assets, including intellectual property rights, supply agreements and third party manufacturing agreements.

While details of the transaction were not available, Marico said it expected revenue of Rs.150 crore from the acquired business in 2011-12. The assets are in the process of being transferred to a separate company in which Marico will acquire 100 per cent stake and the transaction is expected to close in the next few months. The buy is to be funded through a mix of internal accruals, equity and debt.

According to Marico, the acquired brands in the portfolio are among the top three positions in the hair gels, male deodorant and leave-on hair serum categories.

Hair care segment

Speaking to this correspondent, Saugata Gupta, CEO (Consumer Products Business), Marico, said, “the acquisition fast-forwards our journey towards creating a portfolio for the future with a significant presence in the male grooming and post wash hair care segments.''

He added that the categories like hair gel and conditioners were growing at 20 per cent while deodorants were growing at 40 per cent annually. “These products have had low penetration and are at the bottom of the growth curve but are at an inflexion point and we want to take advantage of this. Besides, we had no youth brands and the acquired portfolio addresses the grooming needs of the youth. It will increase the synergies with our international business portfolio in Vietnam and the Middle East.''

Marico said it would leverage its distribution strength in India and provide a fillip to the growth of the brands. Its flagship products include hair oil brand Parachute and edible oil Saffola and Marico said the acquisition of the business was expected to further reduce its dependence on edible oils and hair oils.