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April 18, 2011 3:17 AM EDT
Manipal Group's home fragrance company, Primacy Industries, one of the top global manufacturers of premium scented candles, has acquired US-based Midwest-CBK, the company announced on Thursday.
According to media reports, Primacy Industries, based in the port city of Mangalore in India's southern state of Karnataka, is said to have acquired the deal worth $200 million, though the company declined to comment on the value of the deal.
Midewest-CBK, which has more than $ 100 million revenue, is a leading brand in the home decor and fragrance industry in the United States and owns the famous, 100 year old scented candles brand, the Colonial Candles, among others.
The acquisition will provide Primacy Industries a bigger hold in the private label scented candles business in US, Gautham Pai, chairman & MD of Primacy Industries, said, adding that the company holds 85 percent of the share of candles exports from India and account for about 10 percent of the share of total candles imports in US.
Moreover, with the acquisition, the combined turnover of Primacy Industries and its US-based subsidiary, MVP Group International, is now close to $300 million, he said.
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Gautham Pai speaks more about the acquisition to IBTimes.
IBT: Manipal's Primacy Industries has acquired US-based CBK. Could you give us details about CBK?
Pai: MIDWEST-CBK is a leader in the Holiday, Home Décor, Gifts, Candle and Outdoor Living products in the US. The company owns household brands like Colonial Candles, Seasons of Cannon Falls and CBK. Colonial is a 100 year old scented candle brand. The company has sales greater than $ 100 million and has relationship with more than 30,000 premium independent stores. The company has a manufacturing base in Elkin, North Carolina.
IBT: What are the synergies of this acquisition? In what ways are you going to enhance cost efficiencies and revenue of the new business?
Pai: The acquisition of Midwest-CBK provides us immediate access to a large distribution foot print and strong presence in the branded candles space. One of the strong point of Midwest-CBK is the in-house product design team which has been delivering high margin products every season.
This acquisition makes us the largest player in the private label scented candles business with ownership of established brand names. We will also be the largest integrated player in this business with manufacturing and sourcing base in India, Vietnam, Hong Kong and China and market access to US and Europe. We will now be able to integrate the complete supply chain for the existing products of Midwest-CBK and gain technical economies of scale. Midwest-CBK also opens up the large giftware segment in which we see immense global opportunity.
IBT: It's been mentioned that Manipal has acquired CBK via MVP. Could you provide us details of MVP and for how long Primacy has been associated with MVP?
Pai: MVP has been a subsidiary of Primacy for slightly more than a year. However, Primacy has been associated with MVP Group right from its inception 7 years back. The original promoters of MVP Group have been the joint owners of Primacy right from inception.
IBT: What is the total Fragrance candle market value and post this acquisition, what will be the total market share Primacy will have in Fragrance candle category?
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