- 09 Dec 2022
- ICICIdirect Research
HUL ACQUIRES OZIVA, WELLBEING NUTRITION IN HEALTH & WELLBEING CATEGORY
HINDUNILVR - 2849 Change: -44.60 (-1.54 %)News:
HUL has forayed into the health & wellbeing category with the acquisition of a 51% stake in Zywie Venture Pvt Ltd (owns the brand OZiva) for a cash consideration of Rs 264 crore. It would acquire balance 49% stake at the end of three years on pre-agreed valuation criteria. The company also acquired 19.8% stake in Wellbeing Nutrition for a cash consideration of Rs 70 crore. OZiva & Wellbeing Nutrition sales was at Rs 124 crore and Rs 19 crore, respectively, in FY22. Gross margin for both businesses is higher than the current gross margin for HUL. OZiva has being acquired at FY22 price to sales of 4x whereas Wellbeing Nutrition was acquired at FY22 price to sales of 18x (but 7x on annual revenue run rate of Rs 50 crore)
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OZiva is a plant-based and clean label consumer wellness brand in lifestyle protein, hair & beauty supplement & women’s health. Similarly, Wellbeing Nutrition's product includes Melts (oral thin strips), Slow (slow release capsule) & Marine Collagen powder focused on beauty, everyday health, gut health and sleep. Both these companies are strong D2C companies. With this acquisition, HUL would be able to leverage its distribution network and marketing capabilities to expand the presence and consumer reach of these brands. These brands are present in niche categories with product prices in a premium range. HUL would be able to grow these brands at a faster pace and given gross margins are relatively high, it would add to the profitability of the company from first year itself
Impact:
Positive