Sheela Foam, India’s largest home mattress manufacturer, purchased a controlling stake in the furniture rental company Furlenco, the company said in a release filed with stock exchanges. Sheela Foam will infuse a primary fund of Rs 300 crore to buy 35% stake in Furlenco at a valuation of Rs 857 crore.
The acquisition will be funded by a mix of equity, internal accruals, and debt. The Furlenco transaction is likely to complete by August 2023.
Furlenco is a flagship brand of House of Kieraya (HOK), a start-up-based in Bengaluru founded by Ajith Mohan Karimpana who is the current CEO of the company. It has a revenue of Rs152 crore in FY23. Bollywood actress Deepika Padukone is an investor in the company.
Sheela Foams operates mainly through exclusive brand outlets (EBO). The acquisition of Furlenco will help Sheela Foams to diversify in the furniture business. This will increase its addressable market while saving time-to-market to create a furniture brand from scratch. Post infusion of fresh equity, Furlenco is expected to become self- sufficient and likely to turn EBITDA positive by October 2023 and PAT positive by FY25.
