Sheela Foam shares zoom 11% on deal to buy Kurlon for Rs 2,150 crore

Sheela Foam Limited jumped 11 percent to Rs 1,241 at 12:43pm on July 17 with 30,000 shares changing hands on the NSE. The gain in stock price comes after Moneycontrol reported that the company will acquire rival Kurlon Enterprise for Rs 2,150 crore in one go, instead of paying Rs 3,250 crore across two tranches.

Moneycontrol had earlier reported that the potential acquisition of Kurlon Enterprise, which is famed for mattresses sold under the Kurl-on brand, would raise the market share for Sheela Foam to 35-40 percent.

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A source told Moneycontrol that this purchase will help the mattress-maker source more raw material — TDI (toluene di-isocyanate) — at lower rates.

Sheela Foam’s flagship brands include Sleepwell mattresses, Feather Foam, a pure PU Foam, and Lamiflex, a polyester foam for lamination.

The company’s net profit for the quarter ended March 2023 jumped 9.52 percent to Rs 51.78 crore from Rs. 47 crore a year back. EBITDA (earnings before interest, taxes, depreciation, and amortisation) for March 2023 stood at Rs 80 crore, a 15 percent increase from Rs. 70.13 crore last year.

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