FMCG major Marico on Wednesday announced a strategic investment in Apcos Naturals Private Ltd, which owns ayurveda-based skin and hair care brand 'Just Herbs'. Marico said the company will acquire a 60 percent stake in Apcos for an undisclosed consideration.
This equity stake will be acquired over a period of two years, through primary infusion and secondary buy-outs. Marico will first acquire 52.4 percent of the total paid-up share capital by July 31, 2021, after which Apcos Naturals will become a subsidiary of the company. The balance stake of 7.6 percent will be acquired by March 31, 2023, as per the conditions set out in the shareholder's agreement.
For Marico, the investment is in line with its strategy to accelerate its digital transformation journey through building scalable digital-first brands, either organically or inorganically, as well as to premiumise its play in personal care.
"Just Herbs presents an exciting and differentiated opportunity to have a meaningful play in ayurveda-led beauty categories. This investment is another step towards our aspiration to build a portfolio of at least three Rs 100-crore plus digital brands within the next three years," Saugata Gupta, managing director, and chief executive officer of Marico said. This is also the second such acquisition by the company after it completed the acquisition of a men’s grooming brand Beardo last year.
A direct-to-customer company, Apcos Naturals was co-founded by Arush Chopra and Megha Sabhlok and Just Herbs is a bridge-to-luxury brand that sells a range of hair and skincare products made from plant ingredients and essential oils. While the brand garners a majority of its business through its own D2C website, it is also available on online marketplaces (Amazon, Flipkart and Nykaa) and its exclusive offline stores in select cities.
The company clocked revenue of Rs 17.5 crore in FY21, more than double its revenues of Rs 8 crore in FY20.
"We believe that Marico’s evolved capabilities, processes and systems will complement our ambition to scale up online as well as offline. We are very positive about the future prospects of this partnership and look forward to a fruitful journey with the team," Apccos' Arush Chopra said.
The acquisition of Just Herbs also comes at a time when there has been an increased demand for Ayurveda-based natural products. According to market research firm IMARC, the Indian ayurvedic products market is expected to grow at a CAGR of around 15 percent during 2021-2026.
Marico’s rival Dabur too is increasing its focus on ayurveda-based natural products. Recently, the company invested Rs 55 crore to set up a manufacturing facility in Madhya Pradesh that will manufacture the company's range of food products, ayurvedic medicines and health supplements.