Global private equity (PE) investor Warburg Pincus Llc has secured a majority equity stake in Mumbai-based furniture hardware maker Ebco, underscoring the fast-growing furniture market’s potential in country.
Warburg Pincus will acquire 75-80% of the company at a valuation of ₹3,000 crore, according to a person close to the development.
Ebco’s promoters, Geoffrey Nagpal and family, will retain a “significant” minority stake and be actively involved in business operations after the acquisition, Ebco said in a statement on Friday.
Mint was the first to report on 11 June that the PE firm was a front-runner for acquiring a controlling stake in the furniture hardware maker that planned to sell up to 74% stake for up to ₹3,500 crore.
Avendus Capital was the exclusive financial advisor to Ebco.
Ebco is in the process of setting up three manufacturing plants to expand production capacity. A fourth plant is also being considered and is expected to be commissioned soon, said the the person quoted above.
In April, Mint reported that PE funds KKR, Kedaara Capital and TPG, among others, are vying to corner a controlling stake in Ebco, in an over $300 million deal.
PE interest in a company like Ebco comes on the back of an expected 13.37% compounded growth of India’s furniture market to $37.7 billion by 2025-26 from $17.4 billion in 2020-21, according to Invest India. The furniture fittings industry will be a direct beneficiary of this growth.
“We believe that the Indian furniture fittings and architectural hardware industry is poised for significant growth over the next several years, underpinned by tailwinds from favourable demographics fuelling real estate demand, rising furniture modularization, and increasing home renovations,” said Anish Saraf, managing director of Warburg Pincus India.
Founded in 1963, Ebco is one of India’s oldest furniture fittings and architectural hardware brands. It offers over 4,500 SKUs across categories, spanning bed and wardrobe fittings, kitchen systems and accessories, office furniture fittings, window and door hardware, and furniture lights.
With a network of 5,500 retail touch points across the country, Ebco operates three manufacturing plants in Maharashtra with research, development and design capabilities.
The company’s revenues grew to ₹791 crore in 2022-23, according to a 12 March Crisil report. “The revenues are expected to be around ₹830 to ₹870 crore in fiscal 2024,” it said.
“We are targeting to grow to nearly ₹3,000 crore in revenues in five years,” Nagpal told Mint in April.