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Exclusive: Vcare in talks for stake sale, hires banker

Chennai-based VCare Group, which runs a trichology clinic chain and sells herbal hair products under an eponymous brand, is in talks for a stake sale, three people familiar with the development told VCCircle.

Founded by Carolin Praba Reddy, the VCare Group comprises four-five companies including VCare Herbal Concepts Pvt Ltd and Praba’s VCare Health Clinic Pvt Ltd. Vcare Herbal is the distribution and retail division of the group while Praba’s Vcare Health focuses on hair care and skin-related treatments.

Praba’s Vcare Health set up its first hair clinic in 2002 and now has around 16 trichology clinics in Tamil Nadu, Karnataka, Andhra Pradesh and Pondicherry, according to its website. Vcare Herbal sells hair products including oil, hair colour, hair spray, gels, serums, shampoos and conditioners, according to its website.

The group has hired financial services firm Anand Rathi’s investment banking arm for a stake sale, the three people cited above said, asking not to be identified.

One person said the group is in talks with private equity investors for the stake sale but didn’t elaborate.

VCare is likely to attract strategic interest as several consumer goods firms are keen to add personal care products to their portfolio, according to the second and the third person.

The name of the company in which the group will sell a stake couldn’t be immediately ascertained. The promoters separately own the group companies and so might be looking to sell a stake separately to different investors.

The VCare Group and Anand Rathi did not respond to requests for comment. 

The first person cited above also said that the combined annual revenue of group companies is around Rs 100 crore.

The companies have not filed their latest financials with the Registrar of Companies. According to VCCEdge, the data research platform for VCCircle, Praba’s VCare Health posted net sales of Rs 26.7 crore for the financial year ended in March 2015, down from Rs 34.1 crore the year before.

Other deals in the sector
The herbal personal care products segment has seen a handful of other deals in recent years. Emami Ltd acquired herbal oil company SBS Biotech's KeshKing brand for $259 million in June 2015 while Hindustan Unilever boughtMoson's Extraction's herbal oil brand Indulekha for around $50 million the same year.

VCCircle reported last year that Richfeel Health & Beauty, which sells hair products and runs a chain of trichology clinics, had been looking to give its investor a partial exit. Mint newspaper reported last year that Veda Corporate Advisors was running a PE transaction for Richfeel. 

Anand Rathi’s investment banking division, which ran the transaction for the sale of Indulekha hair oil to Hindustan Unilever, is also helping Chaturbhuj Pharmaceuticals, a sexual wellness company in the Ayurvedic and herbal segment, find a buyer.

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Anand Rathi Advisors Ltd. is an investment banking firm. It offer loan syndication, trade finance, structured finance, commercial papers, capital markets and private equity advisory services. The firm also provides financial services and wealth management solutions to institutions, corporations and high net worth individuals. The company was incorporated in 1987 and is based in Mumbai, Maharashtra.

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