Fast moving consumer goods company Dabur is planning to acquire more companies in the healthcare segment in India and could spend up to Rs 500 crore (Rs 5 billion) for the buyouts. The move follows the recent acquisition of Fem Care Pharma for over Rs 250 crore (Rs 2.5 billion).
The company is also open to brand buyouts of up to Rs 200 crore (Rs 2 billion). "We are looking for acquisitions of companies in the range of Rs 200-500 crore and brand acquisition of Rs 10-200 crore (Rs 100 million to Rs 2 billion)," Sunil Duggal, chief executive officer, told Business Standard, adding: "There is no financial cap, but it should be a good fit and have scalability."
As with the past acquisition of Balsara - which added brands like Promise, Meswak, Odonil and Odopic to its oral care and home care portfolio - or the recent acquisition of Fem, which now gives it a presence in the Rs 2,500 crore (Rs 25 billion) mainstream skincare products market, Dabur is keen to diversify its traditional healthcare portfolio from ayurveda to include mainstream brands.
Dabur's healthcare segment comprises includes three divisions - ayurvedic medicines (preventive),a small but profitable business; over the counter or OTC (preventive and curative); and health and wellness products like Dabur Chyawanprash. "We are not wedded to the ayurveda platform, so will look at developing or acquiring brands that cater to the healthcare segment," said Duggal.
In 2006, the company had evaluated the Protinex and Farex brands before they were acquired by Wockhardt. The two brands have a combined turnover of a little over Rs 60 crore (Rs 600 million) and are now back on the sale block. The brands provide the company a good fit with its health supplements portfolio, is the feeling. The company, when asked, declined to make any comment in this regard.
The maker of Hajmola, Real and Vaatika has a turnover of Rs 2,800 crore (Rs 28 billion), of which over 35 per cent of its revenues come from healthcare, 50 per cent from personal care, 10 per cent from food and beverages and 5 per cent from home care.
"In the course of the next few years, we see healthcare growing from 35 per cent to 40-45 per cent and personal care contributing another 40 to 45 per cent, and the remainder of our revenues coming from F&B and homecare," said Duggal, who is aiming for an organic growth of 15 to 20 per cent, and further growth from acquisitions and mergers.
The organic growth will come from more launches across its portfolio of skincare, haircare and F&B brands. "Later this year, the company will launch a new ayurvedic brand. It will also roll out brands under the Fem umbrella.
Besides, it will launch variants of light oils and shampoos. Likewise, Burst, its latest juice brand, will also soon be rolled out nationally," says Percy Panthaki, analyst, FMCG sector, HSBC Securities and Capital Markets.