Authum, Mahi Kela to acquire 46.85% stake in Prataap Snacks for Rs 846.6 cr

Authum Investment & Infrastructure, along with Mahi Madhusudan Kela, will acquire a 46.85 per cent stake in Prataap Snacks, the Indore-based packaged foods company that owns the snack brand Yellow Diamond and sweet snacks brand Rich Feast, in a deal valued at Rs 846.60 crore.

They have entered into a share purchase agreement on Thursday to acquire the entire 46.85 per cent shareholding, which is around 1.02 crore equity shares, from its three Private Equity promoters, according to an early morning filing by Prataap Snacks.

The three Private Equity promoters -- Peak XV Partners Growth Investments I, Peak XV Partners Growth Investment Holdings II and Sequoia Capital GFIV Mauritius Investments hold stakes of 2.48 per cent, 34.65 per cent, and 9.72 per cent, respectively.

 

"The acquirer and PAC (Persons Acting in Concert) have entered into a share purchase agreement dated September 26, 2024, with the sellers, pursuant to which the acquirer has agreed to acquire from the sellers 1.02 crore equity shares of the target company... at a price of Rs 746 per equity share for an aggregate consideration of Rs 846.60 crore," it said.

Besides the company has also announced an open offer, triggered by the acquisition of a controlling stake, to acquire a 26 per cent stake in the company from the market.

"Since the acquirer and PAC have entered into an agreement to acquire voting rights in excess of 25 per cent of the equity share capital and control over the target company...," it said.

In the open offer, a price of Rs 864 per offer share has been offered. If fully subscribed, the open offer will be aggregated to a total consideration of Rs 544.17 crore.

Shares of Pratap Snacks were trading at Rs 1,033.15 apiece on the BSE this afternoon, and the offer price is 16.37 per cent lower than that.

Prataap Snacks had touched the highest price of Rs 1,371.45 on January 18, 2024.

Prataap Snacks will remain a listed entity post the open offer and the acquirers do not intend to de-list the stock, the exchange filing stated.

"The acquirer does not intend to delist the Target Company pursuant to this Open Offer," it said.

However, it also added that the open offer is conditional and subject to the completion of the share purchase agreement with the promoters.

"The share purchase agreement also sets forth the terms and conditions agreed between the acquirer, the PAC and the sellers, and their respective rights and obligations. The completion of an open offer is a condition precedent to the Underlying Transaction," it said.

Established in 2003 in Indore, Madhya Pradesh, Prataap Snacks is amongst India's fastest-growing snack food companies.

It operates 15 manufacturing facilities (8 owned and 7 contracted) and partners with over 5,200 super/sub-distributors, reaching 2.5 million touchpoints across the country.

For the financial year 2024, its revenue was at Rs 1,617.93 crore. It has a CAGR growth of 14 per cent in the last 10 years.