Sheela Foam to acquire Kurlon Enterprise in Rs 3,250 crore deal

28 Jun 2023 , 12:10 PM

According to sources, Sheela Foam Ltd. will fully acquire rival Kurlon Enterprise Ltd, picking up a 100% stake in the company in two tranches for a cash consideration of Rs 3,250 crore. The transaction is expected to be finished within a few months.

Sheela Foam, known for the Sleepwell brand, will nearly double its market share after acquiring Kurlon Enterprise, maker of the Kurl-on brand of mattresses. As per the reports, if the deal goes through, Sheela Foam’s market share in India’s organized mattress segment could shoot up from 20-25% to 35-40%.

Sleepwell mattresses, Feather Foam, a pure PU Foam, and Lamiflex, a polyester foam for lamination, are among Sheela Foam’s flagship brands.

Sheela Foam dominates the north and west, while Kurlon dominates the south and east. The transaction will also result in cost savings and synergies.

The consolidated topline of the listed company is expected to increase by around Rs 900 crore.

Furthermore, as a result of this agreement, Sheela Foam will be able to obtain more raw materials, such as TDI (Toluene Di-Isocyanate), at lower prices.

Following the agreement, Sheela Foam’s combined purchase of TDI for itself and Kurlon will enable the company to obtain a larger bulk discount. Aside from raw material sourcing, there will be operational synergies at the factory level, as well as capacity utilization optimisation at both companies’ plants.

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