The acquisition of Capital Foods Pvt Ltd has been in the works for several months now, and the competition for the acquisition has reportedly intensified in recent weeks.
Nestle India, a subsidiary of Nestle SA, is among the final bidders for the company. Nestle India’s shares gained almost 3 percent on March 31 afternoon following this news. The exact details of the proposed acquisition have not been revealed, and sources did not confirm if the transaction would be entirely in cash or part stock.
Capital Foods was founded in 1995 by Ajay Gupta and has since established itself as a leading player in the FMCG sector in India. The company produces a range of food products, ingredients, and condiments under its popular brands Ching’s Secret and Smith & Jones. Some of the products offered by Capital Foods include instant Chinese noodles, soups, condiments, curry pastes, ginger garlic paste, sauces, and baked beans.
According to analysts, Capital Foods is set to generate revenue of around INR 800 crore for the financial year 2022-23. The company’s topline growth has been impressive, with its revenue compounding over 18 percent over the last ten years, from INR 145 crore in FY13, when Kishore Biyani exited the company. Capital Foods’ three major shareholders – Invus Group, General Atlantic, and Ajay Gupta – had decided to sell the company last year, leading to the current acquisition bid.
Several FMCG brands are vying for the acquisition of Capital Foods, including Nestle, Kraft Heinz, Hindustan Unilever, Tatas, ITC, Orkla, and Nissin Foods. Orkla, which owns MTR and Eastern Condiments’ packaged foods business, and Kraft Heinz Co, which is the fifth-largest food and beverage company globally, are among the companies competing for the acquisition. Some bidders have proposed buying up to 75 percent of the firm and making it public, according to sources cited by the Economic Times.
However, the details of the acquisition are yet to be finalized, and it remains to be seen which company emerges as the successful bidder.
