The Shares of Dabur India were up to 4% in the company’s intra-trade on Thursday, when the company announced the acquisition of a 51% stake in the Badshah Masala Private Limited for Rs 587.52 crore.
While posting its quarterly results for September, FMCG major Dabur India announced the acquisition of its 51% stake in Badshah Masala Pvt Ltd. The stake is Rs 587.52 crore and the balance 49% of the stake would be acquired after five years.
As per the company’s filing, "Dabur has entered into a share purchase agreement("SPA") and shareholders agreement ("SHA") on 26 October 2022 with the existing promoters and shareholders of the Badshah Masala Pvt Ltd (Target Company) for the acquisition of 51% equity shareholding of the Target Company from its various shareholders (balance 49% to be acquired after a period of 5 years). Upon acquisition, the Company will add ground spices, blended spices, and seasonings to its portfolio. The acquisition is in line with the Company's strategic intent of entering into new adjacent categories in the food space.”
The company’s file also said, “Cost of acquisition of 51 per cent equity shareholding has been agreed at ₹587.52 crores less proportionate debt as on the closing date (100 per cent enterprise valuation being ₹1,152 crore which translates to revenue multiple of around 4.5x and EBIDTA multiple of around 19.6x of FY 2022-23 estimated financials).’’
Dabur says that the acquisition was a strategic intent to expand its food business to ₹500 crores in three years and into new adjacent food categories. This move of the company has also marked its entry into over ₹25,000-crore branded spices and seasoning market of India.
The Chairman of Dabur India, Mohit Burman said, “Our investment in Badshah Masala will help expand this business and continue to provide unmatched quality products. This acquisition will accelerate our growth strategy as we continue to build our food business. We intend to leverage our international market presence to grow this business globally.”
On the other hand, the Group Director of Dabur India, P D Narang said, “The transaction is expected to be Cash EPS neutral in the first year and accretive thereafter. The acquisition is expected to be completed within this fiscal. As per our agreement, we will acquire the balance 49% shareholding after 5 years.”
Dabur India Limited is one of India's leading FMCG Companies. Dabur India's FMCG portfolio today includes nine distinct Power Brands: Dabur Chyawanprash, Dabur Honey, Dabur Honitus, Dabur PudinHara and Dabur Lal Tail in the Healthcare space; Dabur Amla, Dabur Red Paste and Vatika in the Personal Care category; and Real in the Food & beverages space.
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