Cases & Deals

Godrej Consumer Products obtains acquisition financing for 51% of DGH Mauritius Pvt. Limited from Darling Group

Client(s) Godrej Consumer Products Limited

Jones Day provided advice to Godrej Consumer Products Limited, one of India's leading, fast-moving consumer goods companies, in connection with the acquisition financing for 51% of DGH Mauritius Pvt. Limited from the Darling Group Holdings, a manufacturer and distributor of hair extension products under the brand names Darling and Amigos. Godrej Consumer Products Ltd. (BSE: 532424) signed an agreement to acquire a 51% stake in Darling Group Holdings for approximately INR 5 billion on June 1, 2011. The transaction was financed by a mix of internal accruals and debt. The acquisition took place in three phases: In the first phase Godrej acquired a 51% stake; however, in terms of markets, not all will be acquired at the same time. Godrej will add a few markets in the first phase. Once completed, the second phase will be triggered in a year. This phase will see the addition of a few more markets, while the remainder will be added in the third and final phase, which will be triggered a year after the second.

Darling Group generates revenues of approximately INR 10 billion. Darling Group's current management team will continue to manage the business. Godrej Consumer Products Ltd. will put in place a cross-functional team consisting of current Darling Group management and Godrej Consumer Products's team members. The cross-functional teams will work in the areas of marketing, sales, manufacturing, finance and human resources. Godrej Consumer Products Ltd. will also have the right to increase its stake to 100% after the completion of the first phase. Acquisition is expected to be Earnings Per Share accretive from year one.

The facility is guaranteed by Godrej Consumer Products Limited.