Sheela Foam to acquire Kurl-on, Furlenco stake for Rs 3,007 crore

Sheela Foam Ltd, owner of popular mattress brand Sleepwell, is set to acquire a 94.66 per cent controlling stake in rival Kurlon Enterprises Limited and a 35 per cent stake in House of Kieraya’s flagship Furlenco furniture for a combined value of Rs 3,007.14 crore, the company said in an exchange filing on Monday.

“With these two within its fold, Sheela Foam is at an inflexion point, where opportunities created by inorganic activity would greatly strengthen the business model and propel a higher level of organic growth,” said Rahul Gautam, Chairman and Managing Director, Sheela Foam.

The deal with Kurl-on, which will consolidate the fragmented mattress market in India, will get Sheela Foam a combined market share of 21 per cent. That deal is worth Rs 2,150 crore. Meanwhile, the Furlenco stake will cost Rs 857.14 crore. The two acquisitions are expected to be completed on or before November 30, 2023 and August 30, 2023, respectively.

Also Read | Sheela Foam to acquire rival Kurlon in Rs 3,250 cr deal: Report

With the acquisition of Kurl-on, Sheela Foam, which reportedly commands a strong presence in northern and western India, can diversify its customer base pan India riding on the latter’s higher market share in the southern and eastern regions of India. The two companies are also said to have complimentary manufacturing facilities and distribution networks.

The deal with Furlenco will help Sheela Foam foray into the branded furniture and furnishing rental market aiding it in becoming a full portfolio company in the segment.

Sheela Foam’s shares rose over 5 per cent on Monday to close at Rs 1,186 a piece.

The company had previously acquired Australia’s Joyce Foam in 2003 with five manufacturing plants and Spain’s Comfort Technologies in 2019.