Sanjeev Juneja has grabbed all the headlines now-a-days by selling his company, Kesh King (hair care brand) to Emami at INR 1651 crore. He was a 38-year-old businessman from Chandigarh, who started his business in a one-room office and used to sell his products via door to door promotion. The transaction was one of the largest transactions in the FMCG sector in the recent times. The brand achieved Rs 300 crore sales in the period 2014-15, thereby increasing at a compounded annual growth rate for more than 60%.
The Kesh King Product portfolio consists of Ayurvedic capsule, hair oil and shampoo. According to reports, the hair oil contributes almost 80% to the total sales, followed by shampoo that accounts for 15% sales and the rest was achieved from capsules.
According to Mr. Juneja, his interest in Indian medicine started since his childhood times, as his father was an Ayurvedic doctor.
Mr. Juneja further says that Kesh King became such a big brand that left the owner only with two options, i.e. either invest heavily and hire a professional team or sell the brand, in order to focus on core competencies for developing unique and newer Ayurvedic products. Thus, Sanjeev Juneja chose the second option.
The Deal In Favor Of Emami
There were a plenty of suitors, such as Bajaj, Dabur, Wipro and Marico. But finally Emami clinched the deal.
As per Juneja, Emami is a strategic fit for Kesh King. The brand is currently sold in almost 5.4 lakh outlets whereas on the other hand, Emami reaches out to 5X more outlets.
The gross margins for Kesh King are estimated to be 70-75%. Resources are finding this deal as good news to the Indian FMCG industry as the FMCG brands are getting better valuation than various other global brands. One of its examples is Reckitt Benckiser that acquired Paras for Rs 3,260 crore in the year 2010.
Sanjeev Juneja will now focus on his three brands, viz. Sachi Saheli in women’s health, Dr Ortho in the pain segment and Roop Mantra in skin care. All these three brands together acquire sales of Rs 100 crore.