Dabur Profile Mergers and Acquisitions

1. DABUR INDIA LTD.
Bhargav Dudagadapa
Gautam Siddharth
1 Vamsikrishna Pedada
Ajinkya Patil
Eshant Gaur
Mohil Poojara

2. DABUR- A COMPANY PROFILE
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3.  Established in 1884, More than
125 years of Trust and Excellence
 3rd largest FMCG company in
India.
 Strong Brand Equity
 Vatika and Real are Superbrands
 Dabur is a household Brand
 Hajmola, Real and Dabur Honey
amongst Most Admired Brands in India
 Wide distribution network covering
3.4 Million Retailers across the
country.
 17 World class manufacturing
plants
 Strong Overseas Presence.
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4. VISION AND CORE VALUES
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5. DABUR- HISTORY
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6. GLOBAL FOOTPRINT
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7. FMCG SECTOR IN INDIA
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8.  FMCG Industry and its Vibrant growth
 Rural Sector-Market of the Future
 FMCG sector is expected to grow at 12-17% upto 2020
and would touch a market value of 4000-6000 billion
Rupees- Booz and Company
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9. POTENTIAL IN FMCG
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10.  Low penetration levels offers growth opportunity across
various Consumption Categories
 Rural Penetration is low but catching up with the urban
levels.
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11. MARKET LEADERS- FMCG SECTOR
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Source:: Annual Report Dabur 2011-13

12. DABUR IN FMCG SECTOR
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Source: Investor Relations report Dabur-August 2012

13. FINANCIALS OF DABUR
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14. FINANCIALS IN BRIEF
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Source: Investor relations Report—Dabur August 2012

15.  Sales Growth was a
combination of volume
growth, price increase and
marginal transaction gains
 Material Costs eased with
material costs at 50% of
sales in Q1FY13 Vs 52.3%
Q1FY12
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Source:Annual Report dabur -2012

16.  Current Market Capitalisation of Dabur (as on 25th
September) ::21699 Crores
 Share Price: 124.65
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Source:Annual Report dabur -2012

17. BUSINESS STRUCTURE
Source: Annual Report 2011-12 17

18. CONSUMER CARE-OVERVIEW
 Source::Industry Relations Report Dabur August 2012 18

19. CONSUMER CARE CATEGORIES
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20. 20

21. 21

22. 22

23. OTC AND ETHICALS
 Repository of Ayurveda
 Range of over 260
products
 Strong Distribution
Network
 Focus on growing OTC
Portfolio
 Inorganic growth as a
way forward
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24. FOOD BUSINESS
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25. Health Supplements
Hair Care
Home Care
High
Skin Care
Market growth
Food Products
Oral Care
Low
Digestive Products
High Low
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Market Share

26. DABUR’S MERGERS AND
ACQUISITIONS
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27. INTERNATIONAL BUSINESS
 Focus Markets
 GCC, Egypt, Turkey, Bangladesh, Nepal, US
 High level of localization
of manufacturing and
sales and Marketing
 Sustained Investment in
brand building and
Marketing
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28. ACQUISITION OF HOBI GROUP
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29. ABOUT THE COMPANY
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30. PRODUCT PORTFOLIO
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31. COMPANY STRUCTURE
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32. TRANSACTION
 Dabur International to acquire 100% stake in three
companies in the group:
 Hobi Kozmetik
 Zeki Plastik
 Ra Pazarlama
 First Overseas acquisition by Dabur
 Total Consideration = USD 69 million (about Rs 324
crore)
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33. ACQUISITION RATIONALE
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34. ACQUISITION OF NAMASTE LABS, USA
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35. NAMASTE LABORATORIES
 Founded in 1996
 Markets a portfolio of products under the brand ‘Organic root
stimulator’ brands
 Present in the US, and in several other countries in Africa,
Middle East, Europe and Caribbean Region of North
America
 Revenue of $93 million for the calendar year 2010 with
EBITDA of about $12 million
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36. TRANSACTION
 Deal value - $100 million (about Rs451 crore) all-cash deal
 Dermoviva Skin Essentials – wholly owned subsidiary of
Dabur completed the acquisition
 100% stake in Namaste Laboratories LLC and its three
subsidiary companies —
 Hair Rejuvenation & Revitalisation Nigeria Limited,
 Healing Hair Laboratories International, LLC and
 Urban Laboratories International, LLC along with its South African
arm
 2nd overseas acquisition by DIL
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37. RATIONALE
 Will serve as a gateway to the US market for
Dabur’s portfolio of consumer products
 Enhances profitability
 Increases stakeholders value
 Adds to Dabur's already strong presence in Africa
 Dabur's entry into the fast-growing USD 1.5-billion
ethnic hair care products market in the US, Europe
and Africa
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38. ACQUISITION OF FEM CARE PHARMA LTD 38

39. FPCL
 Fem Care Pharma Limited was promoted in 1982
 Listed on Bombay Stock Exchange since 1994
 The company markets bleach, liquid soaps and hair
removing creams under the ‘Fem’ brand
 Distribution reach covering 1,25,000 retail outlets;
also covers 25,000 parlours directly
 Highly profitable company with gross margins of
over 60%
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40. DEAL STRUCTURE
 DIL has signed an agreement to acquire 72.15% stake from
the existing promoters.
 ™The transaction values FCPL at an equity value of Rs
282.4 crores.
™ Dabur to make an open offer to acquire further 20% of the
FCPL’s equity share capital.
™ Specialty chemicals division and some other investments
will be bought over by promoters at book value or market
value whichever is higher.
™ Acquisition to be funded through internal accruals of Dabur
India Ltd.
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41. RATIONALE
 Revenue Synergies
 Brand provides access to DIL into fast expanding skin care market
at mass price points
 Higher reach/penetration for FCPL portfolio through DIL’s
distribution network
 Potential for extending FEM brand into other related skin care
categories.
 Potential in International markets: FEM & Jaquline brands have
presence in GCC/Middle east markets which can be expanded.
 FCPL’s parlour outreach to be leveraged for promoting Dabur’s
personal care portfolio
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42. RATIONALE
 Cost Synergies
 Combined business to unlock synergies : Sales &
Distribution, Marketing, Supply Chain, Sourcing & Manufacturing
 FCPL’s Baddi unit synergistic with DIL’s own skin care plans
 Greater efficiencies possible in trade and distribution
 Combined Adpro spends can be leveraged to reduce media costs
 FCPL’s R&D knowledge in skin care to supplement domain
knowledge for DIL
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43. DABUR ACQUIRES AJANTA PHARMA CAPSULE BRAND
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44. AJANTA 30 PLUS
 Launched in 1990 as an herbal energizer capsule
 Key brand for Ajanta Pharmaceuticals
 30-Plus is one of the oldest and strongest health care
energizer brands in the country
 The financial terms and conditions of the deal were not
disclosed
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45. SWOT ANALYSIS
Strengths
 Competitive pricing
 Ayurvedic Repsitory.
 Strong Brand Image
 Strong Financially
 Strong Research and Innovation base.
 IT base
Weakness
 No direct Outlets.
 Seasonal Demands
 Lack of awareness about Ayurvedic Products 45

46. Opportunities
 Growing Awareness of Ayurveda
 Improper and Unhealthy Food habits
 Growing Rural Markets
 Growing Middle Class Women and Beauty Sector
Threats
 Allopathic Players; Advertising and Distribution
 Growing Substitutes.
 Growing Health Tourism of Kerala.
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47. FUTURE OF DABUR INDIA
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48. RETAIL STORE
 ‘New U’ –A retail store for complete makeover of women
 The brands under NewU includes Dabur’s own private
label, NewU, range of affordably priced cosmetics such as nail
paints, facial kits and hair accessory among others
 Rising beauty consciousness.
 The roughly Rs 7,000 crore organized and unorganized hair
and beauty industry is growing at the CAGR of 35%. At this
rate, it has the potential to become a Rs-30 ,000 crore
business by 2015
 Expansion of presence in Retail sector.
 FDI in Muli-Retail
 Online Marketing.
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49. CRITERIA OF M&A
 Foreign Company/Indian Company
 Plans to expand/Already established retail player in
Beauty Care
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50. GROWTH IN AFRICAN MARKET
 Africa Epi-Center of our growt
 Africa’s real compound GDP growth, about 5
percent annually between 2002 and 2009
 Consumer Spending to be boosted by 35% till
2015.
 New plants in South Africa, Kenya and Nigeria
coming up.
 Products acquired through Namaste Lab and Hoby
have to be leveraged in these markets
 Manufacturing Plants to be set up in Egypt and
Nigeria
 Inorganic growth 50

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52. RURAL PLANS
 FMCG Rural rush
 Low Penetration levels
 High Demand
 Revamped Distribution System in 2011.
 Need Sound logistics systems to supplement
Criteria
 Strong localized logistics system.
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53.  Expansion of Health Suppliments
 Expansion of OTC & Ethicals
 Expansion of Ayurvedic Products
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