©DMF Foods Ltd
Global private equity firm Advent International has agreed to acquire up to 68% of Indian snack food producer DFM Foods from its promoters, WestBridge Crossover Fund, LLC and certain other shareholders.
The signed agreement was made on 9 September and the deal is expected to vary between INR 8.52bn and INR 9.38bn ($118 million to $130 million) depending on the open offer subscription.
Under the agreement terms, Advent will purchase up to 34.1 million DFM shares, representing up to 68% of the company’s stock from the selling shareholders for INR 249.50 ($3.48) per share.
Director at Advent in Mumbai Sahil Dalal said: “The food and beverage market in India is a fragmented, regional industry and we look forward to working with DFM to build a larger and broader food and beverage business through further organic growth and targeted M&A.”
By acquiring the share in the company, promoters including WestBridge will fully exit their investments in DFM.
In response Mohit Jain, chairman and managing director of DFM Foods said: “We appreciate the support we have received from WestBridge Capital in expanding the company over the past five years and welcome Advent International as DFM’s new majority shareholder to help drive continued growth and consolidate the business in the future.”
In accordance with the Securities and Exchange Board of India regulations, Advent subsequently intends to purchase an additional 26% stake from DFM’s public shareholders for an offer of INR 249.50 ($3.48) per share.
DFM has been manufacturing, marketing and distributing packaged snack foods in India for over 35 years. The company has expanded its portfolio to include corn rings, corn puffs, wheat puffs and crispy sticks under brand names Crax, Curls, Natkhat and Fritts respectively, as well as offering traditional ‘namkeens’ or savoury snack foods such as bhujiyas and daals.
“DFM is a leader and innovator in a large, fast-growing segment of the Indian food and beverage industry,” said Shweta Jalan, managing director and head of India at Advent International.
“The Company has strong brand awareness and distribution and numerous opportunities for continued growth. We are excited to partner with DFM to help drive its next phase of expansion.”
Completion of the recent acquisition is subject to customary closing conditions and is expected to be finalised in three to four months, becoming Advent’s seventh investment in India in the past four years. The firm has owned shares in operations in India across a variety of sectors including healthcare, consumer products and technology and this deal follows its 2018 investment into Manjushree Technopack, provider of rigid plastic packaging solutions.
© FoodBev Media Ltd 2019