NEW DELHI: Tata Consumer Products has signed a definitive agreement to acquire 100% equity shares of Capital Foods, owner of the brands ‘Ching’s Secret’ and Smith & Jones’, for an enterprise value of Rs 5,100 crore.
In all, 75% of the equity shareholding will be acquired upfront and the balance 25% shareholding will be acquired within the next three years. With this the Tata Group company managed to outdo consumer-goods giants such as ITC, Nestle HUL and Kraft Heinz which were also in the race to acquire Capital Foods.
Sunil D’Souza, MD & CEO, Tata Consumer Products said, “We believe this is a good strategic and financial fit. It will open up significant market opportunities in the fast-growing non-Indian cuisines segment, leveraging the sales and distribution platform that we have built…This transaction will accelerate momentum in our business and is margin accretive to our business.”
Capital Foods has strong umbrella platform brands with a portfolio of unique products for in-home consumption in fast growing categories. Ching’s Secret is a market leader in Desi Chinese across its product categories - Chutneys, Blended Masalas, Sauces and Soups. Smith & Jones is a fast-growing brand catering to in-home cooking of Italian and other western cuisines. The overall size of the categories in which Capital Foods operates in is estimated at Rs 21,400 crore.
This acquisition now pits Tata against Nestle’s Maggi, the market leader in Desi Chinese segment. Ajay Gupta, Founder of Capital Foods said, “The journey ahead is going to be a giant leap for us, full of endless possibilities and definitely exhilarating!” Gupta had founded his company in 1996 and currently holds about a 9.45% stake while the rest is held by private equity funds General Atlantic and Artal Asia.
75% shareholding to be acquired upfront
75% of the equity shareholding will be acquired upfront and balance 25% will be acquired within the next three years. With this the Tata Group company managed to outdo consumer goods giants such as ITC, Nestle HUL and Kraft Heinz which were also in the race