Sheela Foam Limited (SFL), a leading manufacturer of Polyurethane (PU) Foam and home comfort products, has recently announced its acquisition of Kurl-on Enterprises Limited (KEL) and a stake in Furlenco furniture. These strategic deals mark Sheela Foam’s expansion into the modern mattress, branded furniture, and furniture rental markets, enhancing its position as a key player in the industry.
The Acquisition of Kurl-on Enterprises Ltd.: As part of the deal, Sheela Foam is acquiring a 94.66% shareholding in Kurl-on Enterprises Ltd. The equity valuation for the acquisition is estimated at INR 2150 crore. The acquisition is expected to be completed by or before November 30, 2023. This strategic move allows Sheela Foam to diversify its customer base and extend its presence across India, solidifying its leadership position in the modern mattress market.
The Investment in Furlenco Furniture: In addition to the Kurl-on acquisition, Sheela Foam is investing in a 35% shareholding in HOK-Furlenco. The equity valuation for this investment is estimated at INR 857.14 crore. The completion of the investment is anticipated by or before August 30, 2023. With this investment, Sheela Foam gains a strong entry into the branded furniture market and the fast-growing furniture rental market. It also provides an opportunity for Sheela Foam to expand its presence in the furniture sales market and become a comprehensive portfolio company in the segment.
Advantages and Opportunities: Rahul Gautam, Chairman and Managing Director of Sheela Foam, highlights the significance of these acquisitions for the company. The Kurl-on deal enables Sheela Foam to strengthen its leadership position in the modern mattress market by combining Sleepwell’s foam expertise with Kurl-on’s expertise in rubberised coir. The acquisition positions Sheela Foam with a combined market share of approximately 21% in the modern mattress market in India.
The Furlenco deal presents an exciting opportunity for Sheela Foam to enter the branded furniture market and tap into the rapidly growing furniture rental sector. By diversifying its product offerings and expanding its presence, Sheela Foam is poised for higher organic growth and a strengthened business model.
Sheela Foam’s acquisitions of Kurl-on Enterprises Ltd. and a stake in Furlenco furniture demonstrate the company’s strategic vision to expand its market presence and diversify its product portfolio. These moves allow Sheela Foam to solidify its position as a leader in the modern mattress market, enter the branded furniture market, and leverage the growing furniture rental segment. With these strategic acquisitions, Sheela Foam is well-positioned to drive further growth and capitalize on emerging opportunities in the industry.
