Motilal Oswal Private Equity-backed India's leading mattress maker Kurl-on has acquired 100% stake in India sub-continent operations of America's leading premium mattress maker Spring Air. This deal gives Kurl-on two more brands viz. Spring Air and Englader in addition to Spring Air’s operations in Bangladesh, Sri Lanka, Pakistan and India.
Speaking with DNA Money, T Sudhakar Pai, chairman and managing director, Kurl-onEnterprises Ltd, said, it’s a merger as a result of which Spring Air India’s operations are now a part of the Kurl-on’s business. “Targeting at the premium end of the market, Spring Air’s acquisition now broadens our offerings for the market while also boosting our institutional business. The premium American brand is a preferred supplier to most of the global hotel chains who are also expanding their presence in India and the neighbouring markets. We see this acquisition help us tap thatmarket segment and significantly grow our overall mattress business,” said Pai adding that the company is targeting revenues of Rs 2,000 crore in two years from now.
While financial details of the deal were not disclosed, the share swap deal gives Ashok Sharma, chief executive officer and member of the board, Spring Air Bedding Company India Ltd and Spring Air Middle East, a minority stake of about 6%in Kurl-on. Funds managed by Motilal Oswal Private Equity that invested Rs 90 crore back in October 2015 are understood to hold about 12% in Kurl-on Enterprises. As part of this merger, Spring AirIndia’s four manufacturing facilities will also become part of Kurl-on’s operations, which will now have a total of 11 manufacturing facilities and over 10,000 dealers across the country.
Spring Air’s India business, according to Pai, has been valued at $10 million. While Sharma has been remote operating the India sub-continent businesssince a decade now he sees the merger as a greatfit for the two entities.
“There are various synergies that the merged business will be able to leverage on going forward. This will also help Kurl-on gain a larger pie of the organised mattress market in India while expanding and growing it’s clientele and overall business over the coming years,” said Sharma who is already a leading player in the Middle East market.
For the fiscal ended March 2019, Kurl-on recorded revenues of over Rs 1,050 crore with a dominating position in the overall Rs 10,000 crore mattress market in India. According to Ashutosh Vaidya, chief marketing officer, Kurl-on Enterprises Ltd, the unorganised market is still very high at around 67% in this business. “We also have started gaining market share from the unorganised segment with our “Budget Mattress” that’s very competitivelypriced compared to products sold by unorganised players,” said Vaidya.
Mattresses contribute significantly to Kurl-on’s overall revenues however, the company is slowly transitioning itself into a home solutions company. It has already added, sofas, furniture, curtains, upholstery etc to its portfolio of offerings. The company has a separate plan for expanding its retail foot print from 1,300 stores to 2,000 stores in the next couple of years.
“We currently have 100 company owned and operated stores. Our plan is to take this number to 250 by the end of the current fiscal. Funding this expansion will be largely through internal accruals,” said Pai adding that the company has no plans to raise any external funding.
COZY DEAL
- Rs 1,050 cr – Kurl-on's revenues in 2018-19
- $10 mn – Spring Air's India business valued at
- Rs 90 cr – Motilal Oswal Private Equity's investment in Kurl-on in October 2015
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