Lighthouse Fund Picks Up 25% in Duroflex for .₹ 160 cr

Mattress maker to use funds to expand in West, East India

Mumbai: Lighthouse Fund, the consumer-focused private equity fund, has acquired a minority stake in Duro flex, a dominant mattress player in South India.

Lighthouse has invested ₹ 160 crore ($22 million) in Duroflex as primary capital to meet its expansions.

According to people aware of the development, Lighthouse has acquired 25% stake in the mattress maker.

This is Lighthouse’s second transaction in last two months, after it acquired a minority stake in Nykaa, beauty retailer owned by former investment banker Falguni Nayar, last month. Lighthouse’s deal with Duroflex is the largest PE investment in a mattress maker after Motilal Oswal PE invested .₹ 90 crore in India’s largest mattress maker Kurlon in 2015.

Started by Manipal Group’s Ramesh Pai, Kurlon has been looking to sell a controlling stake and talks are on with PE majors Carlyle, KKR, Blackstone and Bain, ET reported in December 2017. Duroflex, which sells products at more than 3,000 retail outlets in South India, plans expanding its footprint in West and East India. The company is expecting a turnover of over .₹ 450 crore in the current financial year.

Duroflex, which plans to utilize the money raised from Lighthouse to fund its expan- sion plans, will add over 500 exclusive business outlets (EBOs) in a couple of years. Duroflex, which has five manufacturing facilities located in Tamil Nadu, Telangana and Kerala, offers products under sub-brands such as Energise, Duropedic and Natural Living.

“We really appreciate various initiatives undertaken by the management to increase the market share led by product innovations and new launches over the last few years. We are very excited by the growth opportunity ahead of the Company,” said Sachin Bhartiya, Partner at Lighthouse.

Launched in 2008, Lighthouse manages three funds with a corpus of about $435 million. After Fund I ($100 mn) and II ($135 mn), Lighthouse raised Fund III of $200 million in 2018. Lighthouse which look for investment opportunities between $5 million to $20 million, invested in major companies such as, Bikaji Foods, FabIndia, Cera Sanitaryware, Capital Trust, Tynor Orthotics and Unibic Foods.

“We look forward to their support and guidance as we expand into new markets and try new business strategies. We have been able to build a strong brand in South India on the back of consistent quality and would want to multiply efforts to replicate similar success in our new markets,” said Mathew Chandy, managing director, Duroflex.

Duroflex, which has five manufacturing facilities, offers products under sub-brands such as Energise, Duropedic and Natural Living

(As published in on Mon, October 29 2018. )