BackTravel Food Services looks to raise $40 million
The fundraising is part of the firm's strategy of increasing footprint in other airports and their chain of offerings
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Mumbai: Travel Food Services Pvt. Ltd (TFS), which develops and manages food and beverage outlets and lounges across domestic airports in cities like Mumbai, Delhi and Chennai, is looking to raise up to $40 million from private equity funds, said three people familiar with the deal, including a private equity fund manager considering the deal.
“The company is seeking to raise $30-40 million as part of increasing their footprint in other airports and their chain of offerings," said the first person mentioned above.
The second person quoted above said that an investment bank has already been appointed to raise the capital.
“They had raised a small round of capital few years back, but this pool of capital will help them increase their bandwidth with international presence too," said the second person.
In an email, the company said it is in the process of exploring various fund raising options as part of the company’s strategic growth and expansion plans.
“Over a short period of time, Travel Food Services has created a leading position as India’s largest F&B Concessionaire in the travel retail segment. We have been growing at a rapid pace establishing our presence at major airports in the country as well as internationally and also diversifying into other travel hubs across India," the company added.
TFS is part of K Hospitality Corp., a diversified food and beverage (F&B) firm, which owns restaurant brands such as Copper Chimney and Irish House. Apart from running its own restaurants, K Hospitality is also involved in managing F&B concessions, banqueting and catering and corporate food services.
In 2009, Sunil Kapur, the promoter of K Hospitality, started TFS. Kapur had also set up Blue Foods, an F&B platform with several brands and food outlets across India. Blue Foods, which was eventually acquired by private equity firm Everstone Group, is now known as Pan India Food Solutions.
TFS is currently has outlets at Mumbai, Delhi, Chennai, Kolkata and Mangalore airports. It also manages airport lounges at the Mumbai international airport.
Overseas, TFS manages outlets at the Muscat international airport in Oman.
According to the company’s filings with the Registrar of Companies (RoC), in the financial year 2013-14, TFS reported a revenue of Rs.121.3 crore, as compared to Rs.95.8 crore in the previous year. It reported a profit of Rs.10 crore in 2013-14, compared to Rs.3.85 crore in the previous year.
TFS caters to over 90 million passengers across travel hubs in India and internationally, according to the firm’s website. It operates diverse food and beverages formats like restaurants, cafés, food courts and lounges. Some of the brands it has partnered with include KFC, Domino’s Pizza, Häagen-Dazs and The Coffee Bean and Tea Leaf. Apart from partnering with established F&B brands, TFS also runs its own proprietary brands such as Smoke House Bar and Cafe, Cafeccino, Signature Bar and Ultra Bar.
In 2012, TFS entered the in-flight catering business through a joint venture with Gate Gourmet, a global firm involved in the food and beverage business in the aviation sector. The TFS-Gate brand caters to over 500 flights a day, according to the firm’s website.
With increasing airline traffic and a growing number of travellers, investment bankers expect a pick-up in sales for airport service providers.
“Most Indian airports are new and there is a huge scope for these operators to set up shops and scale their businesses. Also, with air-traffic going up, people are spending lot of time and money in the airport which boosts sales for these firms. In most cases, they have a profit marked revenue share model," said Ashutosh Maheshvari, managing director and chief executive officer at Motilal Oswal Investment Advisors Pvt. Ltd.
Another fund manager adds that there have been three-four deals in the market where service providers to airports have been looking to raise funds. He declined to name the companies seeking to raise capital.
This is an interesting space and funds are keenly looking at this space, said the fund manager requesting anonymity.
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