BackOrkla confirms MTR buy
Orkla confirms MTR buy
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Bangalore: Norwegian food company Orkla confirmed it acquired MTR Foods in an all-cash deal that values the maker of vegetarian, ready-to-eat dishes at Rs400 crore. The deal is expected to be completed by the end of March 2007. Some 59% of MTR Foods is held by the promoters, the Maiya family, while equity investors, JP Morgan (26%) and Aquarius Capital (14%) hold the other significant stakes.
Last year, MTR hired investment bankers NM Rothschild to advise the company.
Several suitors, including ITC Foods, ConAgra, Tata Coffee, and US spices giant McCormick kicked the tyres before Orkla triumphed.
The sale price is seen as a good premium for the Maiyas, as MTR Foods was earlier estimated to be worthRs 300 crore.
Orkla will make investments in extending the MTR product line. The line already includes a range of ready-to-eat curries, spice mixtures and snack foods. Orkla also plans to increase the MTR brand presence in European supermarkets.
The MTR top management is expected to continue running the company to help with the transition that could last two years. This is seen as an important element of the acquisition, as the MTR brand dates back to 1924, when the Maiya family first set up an eatery, Mavalli Tiffin Rooms, now regarded as an important slice of Bangalore’s heritage.
Orkla’s product lines, which include seafood, pastries and pizzas, could also be imported into India, allowing the Norwegian major to piggyback on MTR’s distribution network. The vegetarian-only MTR Foods brand is not likely to be changed to accommodate Orkla’s products, said a company spokesperson.
MTR Foods is likely to post annual revenues of Rs165 crore at the end of March, with revenue projected to increase to Rs200 crore the following year.
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