Sheela Foam announces stake acquisitions in Kurlon Enterprises and Furlenco

Sheela Foam Limited, a leader in foam-based home comfort products and the largest Polyurethane (PU) Foam manufacturer, has made a significant announcement about two simultaneous acquisitions.

The company is acquiring a controlling stake in Kurlon Enterprises Limited, known for its flagship brand Kurl-on or ‘Mattress of India’, and a stake in Furlenco, a fast-growing online furniture brand owned by House of Kieraya Private Limited (HOK).

The company will acquire 94.66% of shares in Kurlon Enterprises at an equity valuation of Rs 2,150 crores, with the deal expected to be completed by or before November 30, 2023. At the same time, Sheela Foam is investing in a 35% stake in HOK-Furlenco, with an equity valuation of Rs. 857.14 crores. The Furlenco investment is set to be finalized by or before August 30, 2023.

The acquisition of Kurlon Enterprises solidifies Sheela Foam’s leadership in major product categories, leveraging its own brand Sleepwell’s strengths in foam, and the acquired Kurl-on brand’s dominance in rubberized coir. The combined market share of the two companies will now be around 21% in the modern mattress market in India. Furthermore, the deal facilitates a pan-India footprint, as Sheela Foam has a strong presence in northern and western India, while Kurlon Enterprises is more prevalent in the southern and eastern regions. The consolidation also offers robust distribution networks, production efficiencies, and cost savings.

On the other hand, the deal with Furlenco allows Sheela Foam to penetrate the burgeoning branded furniture and furniture rental market, extending its reach to a larger Total Addressable Market (TAM) of Rs. 1 lakh crore. The partnership enables potential synergies, including leveraging Sheela Foam’s distribution network for Furlenco products and services, and collaborative R&D activities.

Rahul Gautam, Chairman & Managing Director of Sheela Foam Ltd., sees these acquisitions as pivotal to the company’s growth. “With the coming together of Kurl On, Sheela Foam will further cement its leadership position in the modern mattress market. The investment of Furlenco would give it a very strong entry into the branded furniture market, and a much bigger market than its existing market. With these two within its fold, Sheela Foam is at an inflection point, where opportunities created by inorganic activity would greatly strengthen the business model and propel a higher level of organic growth,” he stated.

The new acquisitions align with Sheela Foam’s successful track record in turning around businesses, as evidenced by its previous acquisitions of Joyce Foam in Australia in 2003 and Comfort Technologies in Spain in 2019.