Sheela Foam, makers of SleepWell, has acquired Kurlon Enterprises for ₹2,150 crore and 35 per cent in furniture company House of Kieraya (Furlenco) for ₹300 crore.

The company will buy 3.46 crore equity shares of KEL, representing 94.66 per cent, and the deal is expected to be completed by November.

House of Kieraya (Furlenco) is in the business of selling furniture, and the deal is expected to be completed by the end of August.

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, such as mattresses, furniture cushions, pillows, and coverings.

The company’s turnover in FY22 increased five per cent to ₹809 crore from ₹767 crore in FY21. In FY20, its revenue was ₹996 crore. Its audited figures were not available for the last fiscal.

The acquisition will help Sheela Foam consolidate the existing fragmented market of mattresses and foam-based products and diversify its customer base. While Sheel Foam is the leader in northern and western India, KEL has strengths in the southern and eastern regions of India. This acquisition will help the company extend a pan-India footprint, it said.

Synergies and distribution networks

Sheela Foam functions mainly through exclusive distribution networks, whereas KEL is strong in multiple distribution networks, and the acquisition is expected to provide a robust distribution network, it said.

The company and KEL have many complementary facilities, which will help them serve customers from a lesser distance and improve both service and reduce costs. The transaction also has manufacturing synergies, said Sheela Foam.

Established in 1962 as Karnataka Coir Products, part of the South India-based Pai family business group, KEL is headed by Jyothi Pradhan, and it was renamed Kurlon in 1995.

KEL was set up as a subsidiary in 2011 by Kurlon. Subsequently, the business was transferred to KEL in 2014.

KEL deals mainly in the manufacture and marketing of foam and coir-based home comfort products across the “Sit and Sleep” categories, like mattresses, furniture cushions, pillows, and coverings.

Founded in 2012 by Ajith Mohan Karimpana, House of Kieraya (Furlenco) recorded an 18 per cent rise in turnover at ₹152 crore last fiscal against ₹129 crore in FY’22. Its turnover in FY21 was ₹84 crore.

Related Topics