Advent International, a private equity major, today signed an agreement with Shapoorji Pallonji Group to acquire a controlling stake in Eureka Forbes Ltd at a company valuation of Rs 4,400 crore.
Eureka Forbes Limited, a 100% subsidiary of Forbes & Company Limited, will be split into a stand-alone company and then listed on BSE Limited. Upon EFL listing, Advent will purchase up to 72.56% of the then outstanding shares of the company on a fully diluted basis from the SP group. Advent will make an open offer, in accordance with the Sebi OPA regulations.
The SP Group had to sell the company on its commitment to lenders in accordance with their one-off debt restructuring requirements approved by the banks last year. The OTR was approved after the company defaulted on bank loans. The proceeds of the participation will be used to reimburse the lenders.
“We are delighted that Eureka Forbes Limited, a gem of the Shapoorji Pallonji group, has found a new home with Advent while unlocking shareholder value. This transaction also reflects our stated objective and strategy of significant debt reduction and focus on our core competencies and businesses. We thank the family of EFL employees and stakeholders and firmly believe that they will benefit from this transaction, ”said Jai Mavani, Executive Director of Shapoorji Pallonji and Company Private Limited.
“Eureka Forbes’ brand of Aquaguard is a household name in the field of water purification, helping to protect the health and well-being of a large portion of the Indian population. We look forward to working with Marzin Shroff and his team to guide EFL’s next phase of growth and consolidate its market leadership, ”said Shweta Jalan, Managing Director of Advent India PE Advisors Private Limited.
Eureka Forbes was established in 1931 and its parent company, Forbes nd Company, actually dates back to 1767 when John Forbes of Scotland started his business in India. Over the years, the management of the company has changed from the Forbes family to the Campbells, to the Tata group and finally to the SP group.
During this time, Forbes and Co went through a series of mergers and splits and had to divest from various companies. Originally known as Forbes Gokak Limited, the company was renamed Forbes & Company Limited on October 25, 2007. The SP group holds 73.85% of the paid-up share capital of FCL.
After various disposals and shutdowns, In terms of contribution to turnover, on a consolidated basis, EFL (a wholly-owned subsidiary of FCL) contributes more than 80% to its total operating income.