- Acquisition Information
Announcing its intent to fully purchase Kurlon Enterprise Ltd., Sheela Foam Ltd. By purchasing 100% of the business in two separate deals totaling Rs 3,250 crore in cash, the acquisition would be completed. Within a few months, it’s anticipated that the deal will be completed.
- Market Share Effect
The market share of Sheela Foam will increase dramatically as a result of the acquisition of Kurion Enterprise: Sheela Foam currently controls 20–25% of the organised mattress business in India. It is anticipated to almost double after the acquisition, increasing the market share to 35–40%.
- Synergies in Location and Operations
In the north and west of India, Sheela Foam, known for its Sleepwell brand, has a significant market share. On the other hand, Kurlon, known for the Kurl-on brand of mattresses, is established in the South and East. The merger of these two firms will not only broaden their geographic reach but also lead to cost benefits and operational synergies, enhancing their overall efficiency
- Economic Impact
The combined topline of the listed firm is anticipated to increase by approximately Rs 500 crore as a result of the merger. Additionally, Sheela Foam will experience significant cost savings as a result of being able to purchase more TDI (Toluene Di-Isocyanate) at lower prices thanks to the joint purchasing of both businesses. Along with the optimisation of capacity utilisation at both firms’ plants, operational synergies at the factory level are also anticipated.
- The Companies’ Reaction
Sheela Foam and Kurlon have not yet reacted to inquiries regarding the potential deal. 6. - Overview of the Indian Mattress Market
A few branded and numerous unbranded businesses dominated India’s mattress market, which had a value of about $1.7 billion in FY19. It is expected to more than double to $2.8 billion by FY24. The share of the organized, branded mattress industry grew from 29% of the market in FY14 to 35% in FY19 and is expected to reach 40% by FY24. The total market for mattresses in India is estimated at around 18.6 million units, with new demand at around 7 million units per year
Also Read: Care Health Q4 FY2023 Results!