BackPE investor Advent to buy Crax maker DFM Foods
Advent signs a definitive agreement to acquire a majority stake in DFM Foods for an estimated ₹852 croreAcquisition will trigger an open offer to DFM’s public shareholders for an additional 26% stake in the company in line with Sebi rules
PremiumNEW DELHI : US-based private equity (PE) firm Advent International on Monday said it has signed a definitive pact to buy a majority stake in DFM Foods Ltd from its promoters and existing investors, including WestBridge Crossover Fund, LLC, for an estimated ₹852 crore.
Under the share purchase agreement, Advent will buy a 67.90% stake from the promoters Delhi Flour Mills and existing investors, including WestBridge, Aravali Investment Holdings, and Jwalamukhi Investment Holdings, DFM said in a filing to the BSE. The packaged snacks company, which began selling Crax chips in 1984, later expanded its portfolio to add namkeen and wheat puffs under the ‘Natkhat’ brand.
WestBridge, which took a stake in DFM in 2014, will fully exit the company.
The acquisition will trigger an open offer to DFM’s public shareholders for an additional 26% stake in the company in line with rules of the Securities and Exchange Board of India.
The open offer will be made at ₹249.50 per share and based on its response, Advent could end up paying between ₹852 crore and ₹938 crore for the entire deal, the PE firm said in a separate release.
“DFM is a leader and innovator in a large, fast-growing segment of the Indian food and beverage industry. The company has strong brand awareness and distribution and numerous opportunities for continued growth," said Shweta Jalan, managing director and head of India at Advent.
ICICI Securities Ltd is the financial advisor to Advent and manager to the open offer. KPMG is exclusive financial advisor to DFM Foods.
This marks Advent’s seventh investment in India in the past four years. The deal with DFM is expected to close over the next 3-4 months pending regulatory approvals.
Advent has invested over $1 billion in nine companies with headquarters or operations in India in sectors such as consumer products, financial services, healthcare, industrial and technology in the last 12 years.
DFM will remain publicly listed post completion of the open offer, Advent International said in its release.
The company has factories in Greater Noida and Ghaziabad. In the year ended 31 March 2019, the company posted a net profit of ₹32. 8 crore on revenue of ₹483 crore.
India’s salty snacks market comprises brands such as PepsiCo’s Lay’s and ITC’s Bingo, besides Yellow Diamond, owned by Prataap Snacks.
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