Emami is taking over Kesh King in the biggest FMCG deal of this season

In what could be referred to as one of the biggest deal of the season, Emami has raised Rs 950 crore debt to partially fund the acquisition of Kesh King brand of hair products.

The Kolkata-based healthcare products firm known for Fair and Handsome and Zandu Balm will fund Kesh King deal from internal accruals. The balance amount of Emami in the first quarter stands at Rs 1684 crore.

"The Kesh King business is being integrated with Emami's existing business and it has already started contributing to the growth. We plan to make Kesh King a panIndia brand soon," Emami Ltd director Harsha V Agarwal told the financial daily.

Kesh King's market presence was limited to seven states only and Emami plans to export the product in markets where there is sizeable Indian diaspora.

The acquisition enabled Emami to enter the ayurvedic hair and scalp care segment. The company on Wednesday announced 23.9% jump in net Rs 87.75 crore during the profit at first quarter ending June 30 on back of 22.4% jump in sales at Rs 589.87 crore as compared to the same period last fiscal.

Emami said its domestic business during the quarter grew by 23.4% despite prevailing macro-economic challenges and not very favourable weather. The Emami scrip was down by 0.35% to close at Rs 1322.9 at the Bombay Stock Exchange on Wednesday, confirmed the ET news report.

Plans are in place to expand the Zandu brand into newer healthcare categories and will soon start test-marketing some products in Andhra Pradesh, across both over-the-counter and through doctors. Emami has also decided to consolidate its international business on selected geographies such as the Saarc, Middle-East and CIS nations with a plan to grow contribution from 14% of sales to 25-30% in five years.