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Tata Consumer ups F&B game with Rs 7K crore acquisition

The acquisitions will be financed through a combination of cash reserves available with the company, debt and equity issuance through rights Issue or any other modes.

Screenshot 2024 01 14 094001NEW DELHI: Tata Consumer Product Ltd (TCPL) has upped its food and beverages game with the acquisition of Capital Foods and Organic India at a cumulative price of Rs 7,000 crore. Tatas bought Capital Foods at an enterprise value of Rs 5,100 crore, while Organic India, a wellness brand from Fab India group, at an enterprise value of Rs 1,700 crore.

The acquisitions will be financed through a combination of cash reserves available with the company, debt and equity issuance through rights Issue or any other modes. Both the acquisitions are likely to be completed by March-end.

TCPL says that the two acquisitions have massive potential to drive synergies by leveraging Tata Consumer’s distribution network, increasing scale along with scope to deliver significant operating efficiencies. The company says that the acquisitions would add strong complementarity to its F&B (Food and Beverages) platforms and fill gaps in its product portfolio.

As per the Tata Group company, both Capital Foods and Organic India have strong portfolio of high margin products which could improve gross and EBIDTA margins of TCPL in the near-to-medium term. 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.

As for Organic India, TCPL says its organic brand of F&B and herbal supplements products caters to booming, highly fragmented Rs 82,000 crore market. Products of Organic India have omni-channel presence across GT (general trade) stores, e-comm platforms, own website and exports. Organic India is Rs 350 crore plus brand with high quality products focused on “sustainable living”. The products have high gross margins of 55% and above.

 

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