Crompton Greaves Consumer jumps on acquiring Butterfly Gandhimathi Appliances

Crompton Greaves Consumer Electricals rose 3.80% to Rs 393 after the company announced the acquisition of controlling stake in Butterfly Gandhimathi Appliances.

Crompton Greaves Consumer Electricals has signed definitive agreements on 22 February 2022 to acquire upto 55% stake in Butterfly Gandhimathi Appliances at Rs 1,403 per equity share, and trademarks for a consideration of Rs 30.38 crore.

Crompton also launched the mandatory open offer to the public shareholders of Butterfly for the acquisition of upto 26% stake at a price of Rs 1,433.90 per equity share.

The transaction will be subject to completion of customary closing conditions. The transaction is expected to be financed through a mix of internal accruals and debt.

Butterfly Gandhimathi Appliances is engaged in the manufacturing, marketing and distribution of kitchen and small domestic appliances ("SDA"). Its kitchen and small domestic appliances portfolio includes mixer grinders, table top wet grinders, pressure cookers, stainless steel vacuum flasks, LPG stoves and non-stick cookware.

In FY21, Butterfly reported revenues of Rs 870 crore (about 21% CAGR over the period FY17-21), with EBITDA of Rs 80 crore. In 9M FY22, Butterfly reported revenues of Rs 806 crore (yoy growth of about 22%) and EBITDA of Rs 75 crore.

Shares of Butterfly Gandhimathi Appliances were up 0.79% at Rs 1402.30 on the BSE.

The transaction will accelerate Crompton's long-term strategic goal of becoming a leading player in the small domestic appliances segment.

Shantanu Khosla, managing director - Crompton, 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 employees.

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. This 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."

Crompton Greaves Consumer Electricals is India's market leader in the category of fans and residential pumps. It makes water heaters, anti-dust fans, antibacterial LED bulbs and a range of other categories like air coolers, food processors like mixer grinders, electric kettles and garment care like irons.

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