Angel Broking, Marico acquires 85% stake in ICP

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Marico acquires 85% stake in ICP
The deal: Marico has announced the acquisition of Vietnamese FMCG Company,
International Consumer Products Corporation (ICP), for an undisclosed amount. ICP is
present across personal care, beauty cosmetics and sauces/condiments categories through
its brands X-Men (personal grooming products range for men), L’Ovite and Thuan Phat,
respectively.
About ICP: ICP was set up in 2001 by Dr. Phan Quoc Cong and his partner. Over the years,
the company has achieved a significant presence in the personal care, beauty cosmetics and
sauces and condiments segments in Vietnam. The company's brand X-Men commands a
35% market share in the men’s grooming segment and is the second most trusted brand in
Vietnam, with a leadership position in the men’s shampoo category; while L’Ovite is ranked
amongst the top five premium cosmetics brands in the country. Dr. Phan Quoc Cong will
continue to hold 15% stake until the next three years and will continue to lead as ICP’s CEO.
Our take on the deal: We believe the deal further cements the presence of Marico in S.E.
Asian markets (acquired Code 10 and Derma Rx earlier), and the company can leverage the
brands of its recent acquisition to penetrate into Marico’s existing geographies. According to
sources, the deal is estimated at 2.2–2.4x of sales of ICP (turnover of ~US $25mn in
CY2010) at `250cr–275cr for acquiring an 85% stake. We remain Neutral on the stock.