“Good Glamm’s Raymond brands acquisition in the dock over valuation mismatch, financing woes”
A valuation barrier has prevented the D2C Company Good Glamm Group from acquiring the Raymond Group’s consumer care division, which contains the Park Avenue and Kamasutra brands.
The Rs 3,000 crore cash-and-stock deals that both parties were discussing have raised concerns from GGG’s current investors. It is still needed to evaluate the economics and integration processes of the recent wave of acquisitions.
In the previous 24 months, Companies including PopXo, Mom’s Co, Baby Chakra, ScoopWhoop, MissMalini Entertainment, Sirona, and St Botanica have been acquired by GGG, which Darpan Sanghvi founded. Raising loans for the acquisition is proving difficult in light of interest rate hikes, inflation, and the collapse in global technology valuations, according to three people with direct knowledge of the development.
If the Good Glamm-Raymond acquisition is completed, the new age company would have unmatched access to the retail network that the Raymond Group has established. The deal has been hailed as one of the biggest M&As in the consumer space currently under consideration.
According to insiders, GGG is also taking longer to close its $250 million new investment round.
With the completion of its Series-D investment round in November of the previous year, the company joined the unicorn club of businesses with a valuation of over $1 billion.
An anonymous firm executive said that the company had better user engagements after numerous acquisitions.
In addition to the 500,000 users of the Good Glamm brand, the company now has 250,000 additional monthly users, the source claimed. According to reports, Raymond’s consumer care company, which generates about Rs 750 crore in annual revenue, has rebounded from the Covid setback and is already posting pre-pandemic sales
Even if the figures have improved, the incremental increase has been more subdued, and some changes have been made to the portfolio’s value.
One of the persons said that Raymond’s request is for more than Rs 3,000 crore, although GGG estimates it to be worth Rs 2,000 crore. According to the study, its net debt at the end of December was Rs 1,250 crore, and by the end of the fiscal year in March, it is expected to have decreased.
Net sales climbed to Rs 4,220 crore two times, while net loss shrank from Rs 353 crore to Rs 3 crore for the first nine months of the company’s financial year 2022.