Sheela Foam to raise ₹1.5K cr to fund Kurlon, Furlenco buy
₹1,500 crore through a mix of debt and equity to fund the twin stake purchases in rival mattress maker Kurlon Enterprises Ltd and House of Kieraya Pvt. Ltd, the owner of furniture rental startup Furlenco, said senior company executives. “We will fund the acquisitions through the mixture of equity, debt and internal accruals," Sheela Foam chairman and managing director Rahul Gautam said in an interview on Monday.
Around ₹800 crore to ₹850 crore will be funded through internal cash accruals, while the company will need to raise around ₹1,500 crore via equity or debt, group chief financial officer Amit Gupta added. Earlier in the day, Sheela Foam announced that its board has approved the purchase of a 94.6% stake in Kurlon and a 35% stake in House of Kieraya. Sheela Foam will pay ₹2,050 crore for the Kurlon transaction, subject to customary adjustments for working capital, debt and surplus cash.
The deal valued Kurlon at ₹2,150 crore, The Furlenco deal is expected to close by the end of August, and the Kurlon transaction by the end of November. Sheela Foam expects to tie up financing for the Kurlon deal by September-end. Sheela Foam will take a 35% stake in Furlenco for around ₹300 crore in cash.
The deal valued the startup at around ₹857.14 crore ($104.5 million). This is almost similar to its June 2022 valuation of around $106 million, according to Tracxn. Mint reported on 8 February on Sheela Foam’s plan to acquire Furlenco.
The fund infusion into Furlenco is a primary investment and will help in retiring debt. Sheela Foam has the option of raising its stake in Furlenco to about 44%, Gautam said. While Furlenco promoters currently own around 11%, private equity firm Lightbox holds 25-26%, with the rest held by small
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