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Dabur (DABUR IN, INR 96, BUY)
Dabur: Acquisition in USA: Details
• Dabur has bought US-based hair care company Namaste Laboratories and its three
subsidiaries for US$100 million (INR 4460 mn) in an all-cash deal. The acquisition is
funded completely by external borrowing and cost of funding is around 3-4%.
Namaste Labs has very little debt on its books.
• Namaste Laboratories was founded in 1996 with annual revenues of US$90 million in
CY09, of which the US accounted for 72% and the rest mainly came from Africa.
Pre-tax profit stood at US$12.5 million.
footprint, hence they sold the company.
• Namaste Laboratories enjoys significant market positions in many countries in
Africa, Middle East, Europe and the Caribbean region of North America. Namaste
makes a portfolio of products for hair loss, damaged hair, thinning and drying and
itchy scalp under the brand Organic Root Stimulator.
• It s products are available in the mass, retail, beauty stores and salons.
• 30% of business comes from Walmart.
• This will help Dabur enter the fast-growing $1.5-billion ethnic hair care products
market in Africa, besides serving as a gateway to the US market for its products.
Dabur plans to aggressively grow Namaste’s sales in Africa. The Namaste group has
a complimentary product mix that can be easily integrated with Dabur. Gary
Gardner, founder and CEO of Namaste, and his management team will continue to
run the business as a wholly-owned subsidiary of Dermoviva Skin Essentials Inc, a
subsidiary of Dabur India. As part of the deal, Namaste’s North American sales
team will be paid an additional $40 million if it doubles sales in four years. The deal
will add to Dabur’s oral care and skin care businesses in the African continent. This
is Dabur’s second overseas acquisition in less than three months.
• Entry in Africa: The company with Hobi and Namaste is ready to make a big leap in
Africa. The company plans to localize manufacturing outside US, this step would
enhance the margins that Namaste products earn which is currently as low as 7-8%.
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