Dabur to acquire 51 pc stake in Badshah Masala

The transaction will be completed by March 31, 2023, the company said in a press release.

The acquisition will be subject to the fulfillment of terms and conditions as per the share purchase agreement and shareholders agreement.

The FMCG firm said, “Dabur India Limited has entered into a share purchase agreement and shareholders agreement with the existing promoters and shareholders of Badshah Masala Private Limited to acquire 51 percent of the equity share capital of the target company and balance 49 percent after a period of five years.”

Adding, “Cost of acquisition of 51 percent equity shareholding has been agreed at Rs 587.52 crore less proportionate debt as on the closing date (100 percent enterprise valuation being Rs 1,152 crore which translates to revenue multiple of around 4.5x and EBIDTA multiple of around 19.6x of FY2022-23 estimated financials)."

Dabur added that the acquisition was in line with its strategic intent to expand its food business to Rs 500 crore in three years and expand into new adjacent categories.

This acquisition also marks Dabur's entry into the over Rs 25,000 crore branded spices and seasoning market in India.

Announcing the acquisition, Dabur India Ltd Chairman Mohit Burman said: "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 food 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 five years," said Dabur India Ltd Group Director PD Narang.

Dabur CEO Mohit Malhotra said: "Branded Spices market in India is growing at healthy double digits, led by increasing consumption, upgradation from unbranded to branded and growing preference for regional flavours across states. The market is dominated by regional players and holds significant potential for growth in the future. Dabur has an existing foods portfolio and views ground and blended spices as a good addition to this portfolio….”

Badshah Masala Private Limited Managing Director Hemant Jhaveri said: “This transaction will enable us to accelerate our growth by adding our products to Dabur's broad portfolio to meet the needs of consumers across geographies."