Tata Consumer Products Ltd (TCPL) announced on Friday its acquisition plans for Capital Foods and Organic India, backed by Fab India, with a combined enterprise value of ₹7,000 crore.
The arm of Tata Group is set to secure 100 per cent equity shares of Capital Foods, including brands like Ching’s Secret and Smith & Jones, at an enterprise valuation of ₹5,100 crore. Additionally, TCPL will acquire Organic India, a player in the health and wellness sector, for an enterprise value of ₹1,900 crore.
“The Board of Directors approved the acquisition of 100 percent of the issued equity share capital of Capital Foods Private Limited. The Company, thereafter, has entered into Share Purchase Agreement (SPA) and Shareholders’ Agreement (SHA) with the existing promoters and shareholders of the target company to acquire the entire issued equity share capital in a phased manner,” said Tata Consumer in an regulatory filing.
TCPL has formalised a Share Purchase Agreement and Shareholders’ Agreement with the current promoters and shareholders of Capital Foods, sealing the acquisition of 75 per cent equity shareholding through an all-cash transaction. The remaining 25 per cent will be acquired over the next three years.
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How the deals are expected to benefit TCPL?
TCPL’s entry into the packed food segment aligns with its FMCG transformation.
Acquiring Organic India and Capital Foods, with 75 per cent of the latter’s equity to be secured soon, reflects TCPL’s commitment to high-growth segments. The Organic India deal, an all-cash transaction, aims to establish a robust health and wellness platform, with completion expected in three months.
“The acquisition is in line with the Company’s strategic intent of entering into new adjacent high growth/ attractive margin categories in the food and beverage space. The acquisition will enable the creation of a health and wellness platform,” it said.
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The Capital Foods acquisition, set to conclude by March 31, presents synergy benefits in distribution and logistics, enhancing TCPL’s product portfolio.
“There are significant synergy benefits with the existing businesses of Tata Consumer Products in areas spanning distribution, logistics, exports and overheads,” it said.
With Organic India’s market presence valued at ₹7,000 crore in India and ₹75,000 crore internationally, the move positions TCPL in a market estimated at ₹21,400 crore, reinforcing its FMCG foothold.
What Capital Foods said?
Capital Foods founder Ajay Gupta said: “Together, Tata and Capital Foods can create a multinational culinary brand that includes multiple food categories”.
(Inputs from PTI)
