International Joint Ventures and Merger & Acquisitions

Bajaj Electricals to Acquire Nirlep Appliances

September 04, 2018

After long deliberation, leading small appliances company, Bajaj Electricals fully acquired cookware brand Nirlep Appliances for INR 42.50 crore in a cash deal.

After long deliberation, leading small appliances company, Bajaj Electricals fully acquired cookware brand Nirlep Appliances for INR 42.50 crore in a cash deal. Following the acquisition, Nirlep became a wholly owned subsidiary of Bajaj Electricals.

Bajaj is a publicly listed company and has pan-India presence. Its current market capitalization is of around INR 5,500 crore and revenues of over INR 4,700 crore. Nirlep was launched in 1968 and is one of the first companies to introduce non-stick coated cookware in India. Their range includes non-stick cookware, hard anodized cookware, gas stoves, pressure cookers, enameled cookware, professional cookware and induction compatible non-stick coated cookware. Nirlep is said to be the foremost company to set up a manufacturing plant for fully automatic non-stick coated cookware and is also the first domestic firm to export to Europe.

At present, Bajaj Electricals has brands named Bajaj and Morphy Richards in the electrical kitchen appliances under its girdle. This deal with Nirlep will give a wider portfolio of products that complements with the current offerings of Bajaj. Moreover, the acquisition will provide Bajaj Electricals a strong grip in the non-electric kitchen appliances category and entrée to the quality manufacturing setup in western India.

Recently, Nirlep Appliances was facing several difficulties in surviving, after the entry of many national and international brands into the cookware market. It got worse when the annual turnover of the company fell from INR 54 crore in 2015-16 to INR 54 crore in 2016-17 and further down to INR 47crore in 2017-18. This union could be of much help to Nirlep Appliances to reclaim its footing in the market.

Mukund Bhogale, Nirlep Appliances founder said, “We have agreed to sell the entire stake in Nirlep to Bajaj Electricals for around Rs 80 crore. The deal involves Rs 42.50 crore for 100 per cent equity and taking over around Rs 30 crore of debt. The rest is some deferred payment".
In a BSE filing, Bajaj Electricals was found saying “The proposed acquisition will make available a running business setup and other synergic benefits to the company. It shall also give the company an exclusive access to Nirlep brand, the state of art manufacturing facility, people, distribution network, intellectual property rights and goodwill of Nirlep”.

Vaish Associates, a partner firm of the Andersen Global network, was the exclusive legal advisor to Nirlep for the transaction. Gaurav Agarwal from Mumbai based investment bank Singhi Advisor was the sole financial advisor for the deal.
Bajaj Electricals has planned to complete the acquisition of entire shareholding of Nirlep Appliances in two tranches. In the first tranche, 80 per cent of shares will be acquired on closing date that is within 60 days from the date of agreement and in the second tranche, the company has a right to exercise call option to acquire remaining 20 per cent of shares any time after closing date.

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