Under the terms of the deal, BBlunt’s hair care and styling products business will be completely owned and managed by Mamaearth parent Honasa Consumer, while the two-decade-old salon business will continue to operate as an independent entity. From the founding team, Adhuna Bhabani, Osh Bhabani and Avan Contractor will be creative directors and Spoorthy Shetty will be CEO.
GCPL already held about 30% in BBlunt from when it first invested in the firm in 2013, while the founding team and other investors held the rest. This is a complete buyout, Mamaearth cofounder and CEO Varun Alagh told ET, adding that the brand will leverage its existing D2C and ecommerce capabilities to grow BBlunt’s product business. Its product portfolio includes shampoos, conditioners, women’s styling products, men’s styling products, and hair extensions.
Mamaearth said the size of the deal is about Rs 134 crore. In a separate filing to the BSE on Monday, GCPL said it will receive a total of Rs 84.5 crore for its divestment of BBlunt. This includes Rs 25.7 crore for its stake in the company and Rs 58.8 crore from brand rights. “The transaction is subject to certain condition precedent and is expected to be completed on or before March 14, 2022,” the filing said.
Explaining the rationale behind the deal, he said, “Hair colour and styling is a very fast growing business and we didn’t have a presence (in it). These brands have a deep-rooted link with salons – L’oreal, for example. BBlunt products are recommended by experts in salons. [BBlunt] will add a new dimension to our existing bouquet of brands.”
The market for hair colour and hairstyling is currently worth about Rs 6,000 crore, according to a statement from Mamaearth.
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Going forward, Alagh plans to double down on marketing BBlunt products with a focus on millennials. BBlunt, he said, clocked revenue of around Rs 50 crore in FY21, and that the current annualised revenue run-rate is even higher.
“BBlunt and Honasa Consumer share a strong synergy and common brand values. Honasa is a strong player in the D2C/ecommerce space and they see great potential in the brand and the salon heritage that we have,” said Adhuna Bhabani, founder and director, BBlunt.
While Mamaearth is the largest brand under Honasa Consumers, it has also launched brands such as Derma Co and Aqualogica. Mamaearth specialises in skincare and baby products, and also has products in the hair care segment. Besides these, Alagh said Mamaearth would look to bolster its presence in the beauty segment.
Shetty termed the deal a “significant milestone” for the company. “This is a win-win situation for both companies and the expected synergies will allow us to broaden our customer, product, geographical and technological base. Our clients will continue to receive the same high-quality service they have come to expect.” she added.
Gurugram-based Mamaearth parent became a unicorn on January 1
after raising $52 million in a round led by existing investor Sequoia Capital.
International expansion
Mamaearth is also expanding outside India. The company has entered the Gulf Cooperation Council (GCC) region, starting with the UAE. Alagh said it recently entered Nepal, where it received good feedback. “Next, we are looking at Bangladesh and Sri Lanka,” he added.
For the financial year ending March 2021, the company had recorded a revenue of around Rs 460 crore. Alagh said he was expecting to close the ongoing financial year with at least double that revenue.
