Sheela Foam to acquire rival Kurlon and furniture maker Furlenco

economictimes.indiatimes.com:

Sheela Foam, India’s largest home mattress manufacturer, is set to acquire rival Kurlon Enterprise, the maker of Kurl-on mattress, and furniture rental company Furlenco said multiple people aware of the development. The announcement to buy stake in both companies is likely to be announced in the next few days. Sheela Foam will acquire Kurlon Enterprise at a valuation of Rs 2,200 crore while it would infuse a primary fund of Rs 350-400 crore to buy controlling stake in Furlenco at a valuation of Rs 1,200-1,500 crore, the people said on condition of anonymity.

The acquisition will be funded by a mix of equity, internal accruals, and debt. Although Sheela Foam has a history of acquisition, this is the first time it has been announcing two acquisitions in one go. An email sent to Sheela Foam, Kurlon and Furlenco remained unanswered till the story went online.

Kurlon Enterprise is a private company currently owned by South India based Pai family. It has a revenue of Rs 795 crore in FY22, while Furlenco is flagship brand of House of Kieraya (HOK), a start-up-based in Bengaluru founded by Ajith Mohan Karimpana who is the current CEO of the company. It has a revenue of Rs152 crore in FY23.

Bollywood actress Deepika Padukone is an investor in the company. The acquisition of Kurlon will help Sheela Foam to create a strong pan-India presence. The latter is strong in the North and West markets while Kurlon dominates the South and East zones.

Noida based Sheela Foam is strong in foams while Kurlon focuses on rubberised coir. Sheela Foams operates mainly through exclusive brand outlets (EBO) whereas Kurlon has a multi-brand outlet (MBO) network. The production facilities of Sheela and Kurlon are to a large extent complimentary giving