Mattress maker Sheela Foam (SFL) is acquiring rival Kurlon Enterprises (KEL), known for the household brand Kurlon, at an equity valuation of Rs 2,150 crore. The company is also purchasing a 35 per cent stake in the furniture rental company Furlenco for Rs 300 crore.
Sheela Foam, which owns the Sleepwell brand, will acquire 94.66 per cent of KEL, subject to customary adjustments for net working capital, debt, and surplus cash, if any, the company said in a regulatory filing to bourses on Monday.
The acquisition is expected to be completed by or before November 30. KEL posted revenues of Rs 808.80 crore for the financial year ended March 31, 2022 against Rs 767.25 crore in the preceding year.
SFL said the Kurlon deal would give it an undisputed leadership across major product categories given Sleepwell’s strength in foam and Kurlon’s strength in rubberised coir.
While both these companies are leaders in their respective product segments, SFL said that it will now command a combined market share of around 21 per cent in the modern mattress market in India.
While Sheela Foam is the market leader in northern and western India, KEL has a higher share in the southern and eastern region of India. Therefore, the acquisition is expected to help Sheela Foam diversify its customer base and extend to a pan-India footprint.