To launch an open offer for acquiring up to 26% stake in Butterfly.
Chennai, NFAPost:Crompton Greaves Consumer Electricals Ltd. (Crompton) will acquire the Chennai-based Butterfly Gandhimathi Appliances Ltd. (Butterfly) for a total consideration of Rs 2,076.63 crore.
It has signed definitive agreements with certain members of the promoter group of Butterfly Gandhimathi Appliances Ltd to acquire up to 55% stake at Rs 1,403 per equity share aggregating up to Rs 1,379.68 crore. Certain Butterfly trademarks in allied and cognate classes from promoter group entities (Trademarks) for a consideration of Rs 30.38 crore, says an announcement by Crompton to the BSE.
Crompton will launch the mandatory open offer to the public shareholders of Butterfly for acquiring up to 26% stake in Butterfly for Rs 1,433.90 for a total consideration of up to Rs 2,076.63 crore, the announcement said.
In FY 21, Butterfly reported revenue of Rs 870 crore (21% CAGR over FY 17-21). In nine months of FY22, Butterfly reported revenue of ₹806 crore (yoy growth of around 22%).
Butterfly, a household name in the kitchen appliances market, is a leading kitchen and small domestic appliances portfolio that includes mixer grinders, table-top wet grinders, pressure cookers, stainless steel vacuum flasks, LPG stoves and non-stick cookware. It is amongst the top 3 pan-India kitchen and small domestic appliances players, the announcement said.
Crompton Managing Director Shantanu Khosla said Crompton has, in its long-term strategic plan, laid out the roadmap to “Extend the Core Product Portfolio.
“A key step in this roadmap is to strengthen the small domestic appliances category. Butterfly, a brand with a vintage of over five decades, has grown to become a strong brand in South India, with deeply ingrained core values and positive culture amongst its employee,” said Crompton Managing Director Shantanu Khosla.
This acquisition provides concrete support to our long-term vision of becoming a leading pan-India kitchen appliances player. Butterfly’s proven channel and brand strategy will form the base for a stronger business led by mixer grinders.
According to analysts, the acquisition sets up a platform for a complete kitchen play, enabling stronger connection with every home. We are excited by the opportunity ahead and wish to serve our valued customers through a most extensive distribution network and a wider range of competitive and innovative products.
Butterfly Chairman V M Lakshminarayanan said as a 50-year-old family and home grown business, the company is proud of the growth story our brand has been a part of.
“Butterfly is a strong brand in South India, and this step will provide an opportunity for the Butterfly brand to achieve pan-India reach,” said Butterfly Chairman V M Lakshminarayanan
Crompton is a synergistic fit, and together, there is great potential for powerful complementarity going forward. We have great respect for Crompton and are happy that this brand which has been so close to us, is being entrusted to good hands at the right stage of its future growth journey. We are certain that Butterfly will reach new heights and successes with its instilled values and culture.”
Kotak Investment Banking acted as Financial Advisor and Manager to the Open Offer for Crompton, and Khaitan & Co acted as Legal Advisor for Crompton, the announcement said.