Mrs. Bector's Food to sell its biscuit business

Motilal Oswal Private Equity which holds about 23% stake will sell business along with stake owned by other promoters

Mrs. Bector’s Food, a leading North Indian company engaged in the biscuits, bakery and condiments business, is looking to sell a controlling stake in the biscuit business and in talks with PE investors. According to people in the know, Motilal Oswal Private Equity, which holds about 23 per cent stake, will sell the business along with the stake owned by other promoters in Mrs. Bector's Food.

The firm has appointed Avendus Capital for advising the stake sale. According to people in the know, the talks with PEs are at preliminary stages as the de-merger of business was completed recently. The financial details of the deal are not known.

Mrs. Bector's Food, which sells products under brand of Cremica, is the supplier of buns, liquid condiments, batter and breading to McDonald’s, Hindustan Unilever, Big Bazaar, Spencer's, Taj Group, ITC, Jet Airways, Air India, Barista, Café Coffee Day, Pizza Hut, Domino's and Papa John's.

The biscuit business contributes Rs 450-500 crore to the annual revenue of Rs 600 crore of the company. Cremica has products such as breads, sauces, bread spreads, ready-to-eat curries and syrups.

Recently, the business was divided equally among Mrs. Bector's Food’s founder Rajni Bector’s three sons – Ajay, Anoop and Akshay Bector. While 25 per cent stake of the condiments business was kept with Akshay, the biscuit business was divided among Anoop and Ajay Bector along with Motilal Oswal PE.

In 2010, Motilal Oswal PE bought the stake in Mrs. Bector's Food from Goldman Sachs for about Rs 70 crore. Goldman Sachs had invested in Cremica in 2006.

When contacted, Akshay refused to talk about the sale process. Avendus Capital did not respond to Business Standard’s queries.

With projects in power and infrastructure stuck and no investment opportunities seen across sectors, PE investors are keen to ride the consumption story in India, mostly in areas such as food and beverages, restaurants and retail.

According to a recent report by Technopak and National Restaurant Association of India, the $48-billion food services market in India is projected to grow to $78 billion by 2018.

Saloni Nangia, president at retail consultancy Technopak, said: “There are many factors driving the growth of the market. Eating out and socialising is increasingly becoming a part of the Indian consumer’s lifestyle.” He also pointed to the rise in the number of women work force as well as their increasing earning and spending power.

The sector offers opportunities both at the front end – at the restaurant and at the back end – including food processing, commissaries and logistics, giving PE firms attractive investment options in multiple areas of the business, she added.
Recently, Manpasand Beverages, the Vadodara-based juice manufacturing and marketing firm, was engaged in discussion with PE firms to raise Rs 100-150 crore.