Godrej Consumer Products acquires Argentine hair care player
Achieving revenues of over $33m in 2009, the Issue Group enjoys market share of over 20 percent in Argentina as well a strong position in Peru, Urugauay and Paraguay, according to GCPL.
“The Issue Group provides us with the perfect platform for establishing a strong presence in the fast growing hair color markets in Latin America. [It] enjoys market leadership in many countries in South America including a presence in Brazil.,” said GCPL chairman, Adi Godrej.
Market for hair colorants in Argentina
The acquisition, which the company regards as an important step for establishing a footprint in Latin America, is valued at approximately eight times EBITDA, and is expected to be EPS accretive in the first year of operations, said GCPL.
According to the company, the market for hair colorants in Argentina has grown at a rate of more than 22 percent over the last two years, and is now estimated to have a value of $200m.
Acquisition of Sara Lee insecticides business
The Issue Group is the latest acquisition GCPL has made as part of its ‘global 3 by strategy’ to target strong regional assets in emerging markets.
The strategy aims to establish a presence in three continents (Asia, Africa and Latin America) through its three core categories of personal wash, hair care and home care.
“We continue to stay true to our battle tested approach of acquiring pioneering local brands with strong leadership positions in attractive geographies that have demonstrated an excellent track record of results and and are run by seasoned management teams,” said A. Mahendran, director of the fast moving consumer goods sector at Godrej.
Consumer goods player, Sara Lee recently sold its 51 percent stake in Godrej Sara Lee to GCPL. The business, which primarily markets insecticides, accounted for 9 percent of Sara Lee’s Household and Body Care business.
