Everstone to acquire Kenstar from Videocon

Everstone Group, an Indian and Southeast Asian focussed private equity firm, said it will acquire the Kenstar home appliances brand and business from the Videocon Group’s Dhoot family.
“The proposed sale, subject to statutory approvals and specific clearances, includes the purchase and transfer of the Kenstar brand and businesses under the brand on a going concern basis, including a state-of-the-art manufacturing facility, as well as assets from Century Appliances Ltd. (an associate of the Videocon Group),” the companies said in a joint statement on Monday.
The Kenstar team led by business head Rajiv Kenue will continue and will be strengthened by the operational capabilities, additional resources and financial investments of the Everstone Group. Kenstar will operate as an independent company controlled by Everstone. “As part of the planned deal, Everstone will also enter into a strategic alliance with Videocon Group, among others, for manufacturing, cooperation on Kenstar brand, and developing new products,” they said.
The deal, which has been running for a year now, had seen suitors such as Orient Electric, Symphony, Havells, Crompton Greaves and Voltas. “Everstone looks forward to significantly invest in the Kenstar brand and leverage our operating expertise to unlock its true potential by strengthening the dealer network, supporting product innovation and investing in brand building,” said Managing Director of Everstone Group, Avnish Mehra.
“Everstone is the perfect partner for Kenstar with the right mix of financial resources and operating expertise to rapidly grow the latent potential of the Kenstar business,” said  Director of Century Appliances, Anirudh Dhoot.
Started in 1995, Kenstar sells air-conditioners, air coolers, mixer grinders and electric kettles, among other domestic appliances. It booked a loss of Rs 26.42 crore on operating income of Rs 1,939.50 crore in the year ended March 31, 2015. Kenstar has a distribution network of about 15,000 dealers. The promoters initially expected a valuation of Rs 1,800 crore to Rs 2,000 crore for the Kenstar business, which was later lowered to Rs 1,500 crore-Rs 1,600 crore. Investment bank Credit Suisse advised the Dhoot family.
ET reported on Monday that Everstone and Kenstar were in exclusive negotiations. Weighed down by debt of Rs 43,000 crore, the Videocon group has been forced to consider selling assets to deleverage its balance sheet. Last year, lenders put pressure on the promoters to sell its Mozambique oil assets to state-run Oil & Natural Gas Corp. for US $2.5 billion and its directto-home business to Dish TV.
Everstone has invested in over 30 companies and has put in more than US $2 billion across vehicles in the Indian market. Its portfolio companies include Burger King in India, Servion, Faces, Regen, YouLookGreat, Modern Foods, Hinduja Leyland Finance and Ozone Overseas.