Sheela Foam Ltd, the maker of popular mattress brand Sleepwell, on Monday, July 17, said its board has approved the acquisition of Kurlon Enterprise Ltd (KEL) and House of Kieraya Private Ltd (Furlenco).

Share Market Live

NSE

The company is acquiring a 94.66 percent stake in KEL for Rs 2,150 crore and a 35 percent stake in Furlenco for Rs 300 crore, subject to customary working capital and other adjustments.

Established in 1962 as Karnataka Coir Products, which is part of the South India-based Pai family business group, it is currently headed by Jyothi Pradhan. The entity was renamed Kurlon Ltd in 1995. KEL was set up as a subsidiary in 2011 by Kurlon Ltd. Subsequently, the business was transferred to KEL in 2014.

KEL is engaged in the business of manufacturing and marketing foam-based and coir-based home comfort products across the 'sit and sleep' solution categories like mattresses, furniture cushions, pillows, and coverings.

The acquisition of KEL will help the company to consolidate the existing fragmented market of mattresses and foam-based products, diversify the customer base, complementary distribution network, and production efficiencies and cost savings, Sheela Foam said.

The acquisition of KEL is expected to be completed by or before November 30, 2023. Kurlon reported a turnover of Rs 995.56 crore in FY20, Rs 767.25 crore in FY21, and Rs 808.80 crore in FY22.

Furlenco was founded in 2012 by Ajith Mohan Karimpana. It is today one of the fastest-growing furniture companies in India and is a tech-driven business. The company is a leading furniture company strong in the online segment. It operates in cities including Bengaluru, Mumbai, and Delhi NCR.

The acquisition of KEL is expected to be completed by August 31, 2023, and will help Sheela Foam to enter the fast-growing branded furniture market.

Furlenco reported a turnover of Rs 84 crore in FY21, Rs 129 crore in FY22, and Rs 152 crore (unaudited) in FY23.

A related party (Rangoli Resorts Private Ltd) is amongst the 80 shareholders of Furlenco and currently owns 1.6 percent of the share capital of Furlenco. Rangoli is also one of the lenders to Furlenco. The transaction is completely on an arm's length basis, the company said.

Shares of Sheela Foam Ltd ended at Rs 1,188.10, up by Rs 66.35, or 5.91 percent on the BSE.

(Edited by : Shoma Bhattacharjee)

First Published:Jul 17, 2023 7:15 PM IST