Global private equity funds, including Blackstone and Carlyle, are in talks with Bengaluru-based fragrance and specialty chemicals maker Indfrag Ltd to acquire a significant minority stake, as per a report in The Economic Times.
The news comes close on the heels of the successful IPO of SH Kelkar, indicating the growing interest by investors in fragrance companies.
Indfrag’s larger peer company SH Kelkar made a successful public listing with its IPO oversubscribed nearly 25 times. Blackstone, which had invested about Rs 250 crore (around$36 million) in the company, made nearly four-time gains from its four-year-old investment.
Indfrag has mandated Lazard to find a buyer in a deal that will value the company at Rs 1,000-1,200 crore ($145-175 million), the news report said quoting sources.
“A formal process is on. We received huge interest, especially after the gains that Blackstone could generate from SH Kelkar. This is a niche segment and Indfrag is an equally competent company,” said one of the people involved in the negotiations.
Indfrag is a leading producer of natural extracts for the dietary supplement, sport nutrition, pharmaceutical, food and cosmetic industries. It exports products to North American and European markets besides Asia and the Middle East.
Indfrag has two manufacturing plants in India and a marketing, warehousing and customer servicing facility located in New Jersey. The company has a capacity of 1,250 metric tonnes of finished product with an emphasis in the production of a host of botanical extracts.
The company also has subsidiaries in Singapore and Switzerland and affiliates in France, Japan and South Korea,
Indfrag has revenue of Rs 300 crore (around $44 million) in 2015, with an EBITDA margin of 25%, said one of the sources