KKR pays Rs 4,600 cr for majority stake in FOGG brand owner Vini Cosmetics

Topics KKR | Stake sale | Investors

Vini, which was founded in 2010, makes branded deodorants, cosmetics and toiletries through its flagship brand FOGG.
Global investment giant KKR has bought a majority stake in personal care company Vini Cosmetics, the maker of Fogg deodorants, from its  founders and venture capital firm Sequoia Capital for $625 million (about Rs 4,600 crore). This is the largest private equity (PE) control deal in the space in the country.

The founder group, led by Chairman and Joint Managing Director Darshan Patel and Joint MD Dipam Patel, will continue to hold a significant stake in Vini and work with KKR in the next phase of the company’s growth, KKR said in a statement on Monday. In addition, existing investor WestBridge Capital will increase its holding in Vini from 21 per cent to 23 per cent.

The previous largest deal in this space was when Sequoia Capital India and WestBridge had led a $168 million (about Rs 1,000 crore then) investment in Vini in September 2017.

Founded in 2010, Vini makes and markets its branded deodorants, cosmetics and toiletries through its flagship brand Fogg and other widely recognised brands such as Ossum and GlamUp.

Market watchers said KKR would build a portfolio of beauty and personal care firms and then go for an initial public offering (IPO). However, KKR did not comment on the matter.

“KKR’s control deal in Vini Cosmetics, other than being the largest deal in this space, also reflects the potential of this space. Beauty and personal care is expected to see a lot of deal activity, growth capital and consolidation,” said Sanjay Bansal, managing partner, Aurum Equity Partners.

Darshan Patel will continue as the chairman of Vini’s board, while Dipam Patel will be appointed as vice chairman.

KKR is making the investment from its Asian Fund IV, which has a corpus of $15 billion. The firm has committed about $5.7 billion of equity through its private equity strategy since 2006. Over the past 12 months, it has made several investments in the country, including in JB Chemicals and Pharmaceuticals, a branded pharmaceutical products company; Lenskart, an omni-channel eyewear retailer; Five Star, a lender to small businesses; Reliance Jio; and Reliance Retail, the retail chain of Reliance Industries.

Gaurav Trehan, partner at KKR, said, “Our investment in Vini also underscores KKR’s long-term commitment to support India’s innovative and dynamic companies as they become leaders in their industries.”

Vini has built a distribution network with approximately 700,000 points of sale and 3,000 dealers, supported by a sales force of 1,200 people. Vini’s products are also sold internationally through a network of general trade and modern trade channels covering 50 countries, with significant presence in South and West Asia.

“Vini has experienced remarkable growth over the last 11 years, but we believe we are in the early stages of what our brands can deliver as consumer demand for high-quality personal care products continues to explode in India, South Asia and other fast-growing markets around the world,” said Darshan Patel.

Shardul Amarchand & Mangaldas acted as legal advisor to the founder group. Steer Advisors was the transaction advisor. KKR was additionally advised by KPMG, EY, AZB & Partners and STB. The transaction is expected to close in July 2021, subject to customary closing conditions.

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