Tata Consumer Products has sealed a significant deal to acquire Capital Foods, the owner of renowned brands 'Ching's Secret' and 'Smith & Jones,' for a total enterprise value of Rs 5,100 crore. This strategic move positions Tata ahead of other consumer goods giants like ITC, Nestle, HUL, and Kraft Heinz, who were vying for the acquisition of Capital Foods.
Under the definitive agreement, Tata will acquire 75% of the equity shareholding upfront, while the remaining 25% will be secured over the next three years. The acquisition aligns with Tata Consumer Products' vision for a strategic and financial fit, presenting substantial market opportunities in the rapidly growing non-Indian cuisines segment.
Sunil D’Souza, MD & CEO of Tata Consumer Products, expressed confidence in the deal, emphasizing its potential to tap into the fast-growing non-Indian cuisines market. He highlighted the leverage provided by Tata's established sales and distribution platform, projecting the transaction to accelerate momentum and contribute to the company's overall margin improvement.
Capital Foods, the target of the acquisition, boasts strong umbrella platform brands with a diverse portfolio of products for in-home consumption in rapidly expanding categories. 'Ching's Secret' leads the Desi Chinese market across various product categories, including Chutneys, Blended Masalas, Sauces, and Soups. Meanwhile, 'Smith & Jones' caters to the in-home cooking of Italian and other Western cuisines. The estimated size of the categories in which Capital Foods operates is Rs 21,400 crore.
This strategic move by Tata Consumer Products places them in direct competition with Nestle's Maggi, the current market leader in the Desi Chinese segment. Ajay Gupta, the Founder of Capital Foods, expressed enthusiasm for the journey ahead, describing it as a giant leap filled with endless possibilities. Gupta, who founded the company in 1996, currently holds about a 9.45% stake, while the remaining shares are held by private equity funds General Atlantic and Artal Asia. The completion of the acquisition involves an initial 75% equity shareholding upfront, with the balance of 25% to be acquired over the next three years.
