KKR bidding for majority stake in Vini Cosmetics

Global investment firm KKR & Co. is reportedly bidding for a majority stake in Vini Cosmetics, which would take the valuation of the Fogg deodorants maker at over $1.17bn (Rs85bn).

A source aware of the discussions told The Economic Times that the India-based cosmetics firm is planning to sell about 53% stake to KKR.

If the deal materialises, existing investor Sequoia Capital and promoters WestBridge may dilute a portion of their holdings. Sequoia holds 17% and WestBridge holds 20% in the cosmetics company.

Founded by brothers Darshan and Dipam Patel, who own 60% stake, Vini Cosmetics was formed after the family sold Paras Pharmaceuticals to UK-based multinational Reckitt Benckiser.

The Patels have been instrumental in building consumer brands such as Moov, Itch Guard, Livon, Krack, and Dermicool at Paras Pharma.

Another source was quoted by the publication as saying: “While (the promoters) are looking to sell around 30% shareholding, Sequoia Capital is expected to dilute its 17% ownership fully. As for WestBridge, it is not ready to pare its ownership. In fact, it (WestBridge) is likely to buy more stake. It wants to purchase shares held by the promoters and Sequoia, as it has the first right to do that, as per the terms of the shareholders’ agreement.”

A third source said:  “This (WestBridge not selling its stake and instead buying additional shares) may emerge as a roadblock to the KKR deal. A final decision has to be made by the end of this month.”

No comments were forthcoming from Darshan Patel, KKR, Sequoia Capital or WestBridge Capital, reported The Economic Times.

“The promoters do not want to exit the business and will continue to run it. Bringing in a deep-pocketed fund such as KKR will help the company expand and enter newer categories,” the source added.

A major part of the $151.6m (Rs11bn) revenue generated by Vini for the year ending March 2020 fiscal, came from the sale of its flagship brand Fogg deodorants. Its earnings for FY20 stood at $38.6m (Rs2.8bn).

The other brands in Vini’s portfolio include facial powder White Tone and cream Glam Up.