Temptation Foods to buy 3 firms for Rs 180 crore

Temptation Foods is close to acquiring three companies for which it has lined up funds worth Rs 180 crore.

The proposed acquisitions are in addition to the company's plan to purchase Marico's jam brand SIL and soy balls Meal Maker, and Everfresh, the second largest player in the frozen food business. The Everfresh deal is likely to be priced at Rs 40 crore.

"We are looking at two companies in the northern region and one in the south. Both the companies we are aiming to purchase fall under the processed food category," said Vinit Kumar, strategic investor and head, Temptation Foods.

Temptation Foods is a major player in export business. With the signing of the new deals, the company will gain a foothold in the local market. The company's stock today closed flat at Rs 215 in a strong Mumbai market.

Temptation is in the process of raising money to fund its acquisitions. It has received approvals from its shareholders to raise up to Rs 150 crore through issue of securities, including fully convertible bonds (FCBs). The company can raise up to Rs 114 crore as the amount that can be raised is limited to five times of the net worth of the company as per the audited accounts of the preceding year.

According to company executives, Temptation will issue up to 29.5 lakh convertible warrants to Venture Business Advisers at a price determined as per the Sebi guidelines, subject to a floor price of Rs 150 per equity share. It will also issue 35 lakh equity shares on a preferential basis to persons other than the promoters, at the price determined as per the Sebi guidelines, subject to a floor price of Rs 150 per equity share.