Dabur to acquire 51% stake in Badshah Masala for Rs 587.5 crore
According to Dabur, the acquisition was in accordance with its strategic aim to expand its food business to Rs 500 crore in three years and expand into new adjacent categories. This will also mark Dabur's debut in the Indian market for branded spices and seasonings, which is worth over Rs 25,000 crore.
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On October 26, Dabur announced that it has paid Rs. 587.5 crores in cash to acquire a 51 percent stake in Badshah Masala. According to the company's press release, the acquisition is expected to be finished before March 31, 2023. The acquisition will be subject to the terms and conditions outlined in the shareholder's agreement and the share purchase agreement being fulfilled.
“Dabur India Limited has entered into a share purchase agreement and shareholders agreement with the current promoters and shareholders of Badshah Masala Private Limited to acquire 51 percent of the equity share capital of the target company and the remaining 49 percent after a period of five years,” according to the FMCG company.
"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 is 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)," it is further stated.
Additionally, it claimed that the acquisition was consistent with its strategic goal of growing its food business to Rs 500 crore in three years and expanding into new adjacent categories. This will also signal Dabur's debut in the Indian market for branded spices and seasonings, which is worth over Rs 25,000 crore.
Dabur India Ltd Chairman Mohit Burman in a statement announcing the acquisition 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, and we intend to leverage our international market presence to grow this business globally."
According to Dabur India Ltd Group Director PD Narang, “As per our agreement, we would acquire the remaining 49% of the shares after five years. The deal is expected to be Cash EPS neutral in the first year and accretive thereafter.”
"This acquisition will help us to accelerate our expansion by adding our goods to Dabur's extensive range to fulfill the needs of consumers across geographies," said Hemant Jhaveri, managing director of Badshah Masala Private Limited.
