After obtaining online maternity and childcare brand BabyOye, a year later, Mahindra & Mahindra (M&M) disclosed that it will sell its franchise business to competitor FirstCry for Rs. 362.1 crore on the basis of slump sale and also invest in it.
As per Mahindra’s BSE filling, a business transfer agreement has been accomplished by and between Mahindra Retail Pvt Ltd (MRPL), a subsidiary of the company, Brainbees Solutions (FirstCry) and founder of FirstCry in order to transmit the franchise division of MRPL (BabyOye) as a going concern on a slump sale basis to FirstCry. The aggregate lump sum consideration for the transfer of the business amounts to Rs. 362.1 crore, it further added. The Board of Directors of the two companies have already sanctioned this strategic step.
Further speaking on the agreement, the company said that on the basis of the structure of the transaction, FirstCry and Mahindra Retail have combined their operations, with Mahindra Retail selling its franchise business to FirstCry, and performing all company stores under a FirstCry master franchise agreement. It further added that FirstCry also raises $34 million (approx Rs. 226 crore) of new equity capital from the Mahindra Group, PE fund Adveq, Kris Gopalakrishnan and participation from all current shareholders.
Mahindra Retail has more than 120 stores all over the country performing under the 'babyOye by Mahindra' brand. The consolidated entity will manage its business under the brand name FirstCry.com - A FirstCry Mahindra Venture. FirstCry.com is going to have a parent base of more than 4 million, a footprint of over 300 stores spread all over 125 cities.
FirstCry was incorporated by Supam Maheshwari , a successful serial entrepreneur, who had earlier built and successfully sold Brainvisa Technologies. He is going to continue as the CEO of the combined entity FirstCry. Mahindra Retail acquired Babyoye.com in February 2015.
As on 14th Oct, Mahindra share price settled at Rs. 1357.10. The stock traded at a fall of 0.86 per cent at Rs. 1358.00.
Mahindra is analyzed by Dynamic Levels as the top 500 performing stocks for the June quarter among the 1700 stocks which are listed on the NSE. Mahindra is fundamentally strong and is safe for investment, as per Dynamic analysts
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