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Home > Business > Business Headline > Report

Godrej buys UK's Keyline brands

BS Corporate Bureau in Mumbai | November 01, 2005 16:53 IST

In its first overseas acquisition, Godrej Consumer Products on Monday said it had bought Keyline Brands Ltd, a London-based consumer products company.

Keyline posted a revenue of 16.7 million (about Rs 132 crore) for calendar year 2004 and its profit before tax was pound 2.2 million (around Rs 16 crore).

Although GCPL declined to comment on the size of the deal, it is understood that the acquisition price is in the range of 17-18 million, around a multiple of eight times the profit of Keyline brands.

The deal includes Inecto Manufacturing Ltd, a 100 per cent-owned subsidiary of Keyline. The Godrej Consumer stock closed the day at Rs 455 on the Bombay Stock Exchange, down by 1.14 per cent.

Keyline owns brands like Cuticura, Erasmic and Nulon and has a strong brand portfolio in the cosmetics and toiletry category.

Adi Godrej, chairman and managing director, Godrej, said, "This acquisition represents the commencement of our building a global presence in the international FMCG market.

Keyline Brands is a consistent profit-making company with a portfolio of many great brands that have tremendous potential to grow in Europe, West Asia and the Asian region. The acquisition will add strongly to GCPL's consolidated topline as well as bottom line."

He added that acquisitions would continue to drive GCPL's profitability. "Acquisitions, both in India and abroad, of profitable businesses and strong brands that have a synergy with our core competencies, will continue to be one of our key strategies in strengthening our competitive position, driving profitability and enhancing stakeholder value," said Godrej.

Keyline has a strong presence in the Gulf as well as in Canada and parts of Europe. It has a strong consumer base in supermarket chains and pharmacies like Tesco, Sainsbury Superdrug and Boots. This gives Godrej trademarks a presence in a large number of countries.

Hoshedar Press, executive director and president, GCPL, said the acquisition would enable the company to place its products in global markets and at the same time provide an opportunity to bring the newly acquired product lines to India.

The company plans to derive further value from the transaction by leveraging its high-quality yet low-cost manufacturing skills and may even manufacture some of the Keyline products in India in the future.

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