The acquisition marks the Dabur's entry into the over Rs 25,000 crore branded spices and seasoning market in India.
Dabur India announced that it has signed definitive transaction agreements to acquire 51% shareholding of Badshah Masala, which is engaged in the business of manufacturing, marketing and export of ground spices, blended spices and seasonings.Dabur is acquiring 51% stake in Badshah for Rs 587.52 crore, less proportionate debt as on the closing date, with the Badshah enterprise being valued at Rs 1,152 crore. This translates to a revenue multiple of around 4.5x and EBIDTA multiple of around 19.6x of FY2022-23 estimated financials.
This acquisition is in line with Dabur's strategic intent to expand its Foods business to Rs 500 crore in 3 years and expand into new adjacent categories. This also marks Dabur's entry into the over Rs 25,000 crore branded spices and seasoning market in India.
Dabur India said it will acquire the balance 49% of the issued and paid-up equity share capital of Badshah after a period of 5 years.
Founded in 1958, Badshah Masala has 52 products available in India and overseas markets. Blended spices form 82% of the revenue. It has 2 manufacturing facilities located in Umargam, Gujarat.
Dabur India chairman Mohit Burman said: "The Indian spices and seasoning category is a large and attractive market. Badshah Masala is one of the key players in this space. 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 Foods business. We intend to leverage our international market presence to grow this business globally."
"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 group director P. D. Narang said.
Dabur India is one of India's leading FMCG companies. It is one of the world's largest ayurvedic and natural health care company. The FMCG major's consolidated net profit declined 2.83% to Rs 490.06 crore on 6% increase in net sales to Rs 2986.49 crore in Q2 September 2022 over Q2 September 2021.
Shares of Dabur India were down 0.93% at Rs 532.10 on the BSE.
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