Godrej Consumer to buy Latin America's Issue Group

Godrej Consumer Products (GCPL) today said it will acquire Latin America-based Issue Group, a market leader in hair colours in several counties in the region.

GCPL has entered into "an agreement to acquire a 100 per cent stake in Laboratoria Cuenca, Consell SA, Issue Uruguay and Issue Brazil (collectively referred to as 'Issue Group')", the FMCG major said in a statement.

The acquisition provides a self-sustaining platform for GCPL's ambitions in the hair care and household insecticides segments in Latin America, the Indian firm said.

"The Issue Group provides us the perfect platform for establishing a strong presence in the fast-growing hair colour markets in Latin America," GCPL Chairman Adi Godrej said.

The acquisition is valued at approximately 8 times EBITDA and is expected to be EPS accretive in the first year of operations, it said, but did not disclose how much it will pay to acquire the group.

This is the third acquisition by GCPL in recent times. It had announced its plans to acquire Tura, a leading beauty brand in West Africa, and has completed the acquisition of the Megasari Group, a leading household care company in Indonesia.

The Indian firm recently entered into an agreement to acquire the 51 per cent stake held by US-based partner Sara Lee Corporation in joint venture Godrej Sara Lee and will own 100 per cent of that business once the deal is closed.

The Issue brand enjoys volume leadership in Argentina, with a market share in excess of 20 per cent. The business had revenues of over $33 million in 2009.

Issue Group is also the market leader in hair colours in Peru, Uruguay and Paraguay and has an emerging presence in Brazil.

"We are very happy to partner with the Godrej Group in Argentina. They are getting access to an extremely strong brand and a dedicated set of employees. We hope that they take the brand to greater heights throughout Latin America and we wish them the very best for the future," Issue Group promoters Roberto Hlace and Oscar Villalba said.