Consumer-focused private equity fund Lighthouse Fund has acquired a minority stake in Duroflex Pvt Ltd, a dominant mattress player in southern India.
Lighthouse has invested Rs 160 crore ($22 million) in Duroflex as a primary capital to meet Duroflex’s expansion plans.
Lighthouse has acquired about 25% stake in Duroflex, according to people aware of the development. This is Lighthouse’s second transaction in last two months, after it acquired a minority stake in Nykaa, beauty retailer owned by former investment banker Falguni Nayar, last month.
Lighthouse’s deal with Duroflex is the largest PE investment in a mattress maker after Motilal OswalNSE 1.90 % PE invested Rs 90 crore in India’s largest mattress maker Kurlon in 2015.
Started by Manipal Group’s Ramesh Pai, Kurlon has been looking to sell a controlling stake and talks are on with PE majors Carlyle, KKR, Blackstone and Bain, ET reported in December 2017.
Duroflex, which sells products at more than 3,000 retail outlets in southern India, plans to expand its footprint in western and eastern India. The company is expecting a turnover of over Rs 450 crore in the current financial year.
Duroflex, which plans to utilise the money raised from Lighthouse to fund its expansion plans, will add over 500 exclusive business outlets (EBOs) in a couple of years. Duroflex, which has five manufacturing facilities located in Tamil Nadu, Telangana and Kerala, offers products under subbrands such as Energise, Duropedic and Natural Living.
“We really appreciate various initiatives undertaken by the management to increase the market share led by product innovations and new launches over the last few years. We are very excited by the growth opportunity ahead of the company,” said Sachin Bhartiya, partner at Lighthouse.
Launched in 2008, Lighthouse manages three funds with a corpus of about $435 million.
Source: Economic Times