Tata Consumer Products Ltd (TCPL) has made significant acquisitions, announcing the purchase of Capital Foods, the owner of the popular Ching’s Secret brand, and Organic India, backed by Fab India, for a combined enterprise value of Rs 7,000 crore.
TCPL, a Tata Group company, will acquire 100% equity shares of Capital Foods, known for brands like Ching’s Secret and Smith & Jones, at an enterprise valuation of Rs 5,100 crore. Additionally, TCPL will acquire Organic India, operating in the health and wellness category, at an enterprise value of Rs 1,900 crore. This move is part of TCPL's transformation into a comprehensive fast-moving consumer goods (FMCG) company, expanding its portfolio into the packed food segment.
The acquisition of 75% equity shareholding of Capital Foods is expected to be completed before March 31, 2024, through an all-cash deal, with the remaining 25% to be acquired within three years. The Organic India acquisition, also an all-cash deal, is anticipated to be completed within three months.
Capital Foods' revenue for the fiscal year ending March 31, 2023, was Rs 705.5 crore, and Organic India's revenue was Rs 324.4 crore. The acquisitions align with TCPL's strategic intent to enter high-growth and attractive margin categories in the food and beverage space.
The total addressable market for the categories in which Organic India operates is Rs 7,000 crore in India and Rs 75,000 crore in international markets, where Tata Consumer has a robust presence. These acquisitions are expected to yield significant synergy benefits in distribution, logistics, portfolio premiumization, and market expansion.
TCPL CEO Sunil D’Souza commented that the transactions will accelerate momentum in the business, being margin accretive, and the strong brand recall of Ching’s Secret and Smith & Jones, combined with operational strengths, instill confidence in driving topline growth and realizing cost synergies.
TCPL, with iconic brands like Tata Tea, Tetley, and Tata Salt, recorded revenue of Rs 13,783 crore in FY23. The company has a history of strategic acquisitions, having acquired Bengaluru-based Kottaram Agro Foods in 2011 to expand its product portfolio.
(With Agency Inputs)
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