Dabur India has announced that it has signed definitive transaction agreements to acquire 51% shareholding of Badshah Masala, which is engaged in the business of manufacturing, marketing and export of ground spices, blended spices and seasonings.
Dabur said that this acquisition is in line with its strategic intent to expand its Foods business to Rs 500 crore in three years and expand into new adjacent categories.
This also marks Dabur’s entry into the over Rs 25,000 crore branded spices and seasoning market in India.
Dabur is acquiring 51% stake in Badshah for Rs 587.52 crore, less proportionate debt as on the closing date, with the Badshah enterprise being valued at Rs 1,152 crore. This translates to a Revenue multiple of around 4.5x and EBIDTA multiple of around 19.6x of FY2022-23 Estimated financials.
Announcing the acquisition, Dabur India Chairman Mohit Burman said, “The Indian spices and seasoning category is a large and attractive market. Badshah Masala is one of the key players in this space. 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 Foods business. We intend to leverage our international market presence to grow this business globally.”
“The transaction is expected to be Cash EPS neutral in the first year and accretive thereafter. The acquisition is expected to be completed within this fiscal. As per our agreement, we will acquire the balance 49% shareholding after 5 years,” Dabur India Group Director PD Narang said.
Dabur India Chief Executive Officer Mohit Malhotra said, “Branded Spices market in India is growing at healthy double digits, led by increasing consumption, upgradation from unbranded to branded and growing preference for regional flavours across states. The market is dominated by regional players and holds significant potential for growth in the future. Dabur has an existing Foods portfolio and views ground and blended spices as a good addition to this portfolio. Badshah portfolio will gain from Dabur’s extensive distribution reach. We look forward to unlocking further synergies and market opportunities to capture the full potential of Badshah Masala.”
Badshah Masala Managing Director Hemant Jhaveri said, “We are delighted to enter into a strategic partnership with Dabur. Dabur stands for Trust and Heritage and joining hands with Dabur will help drive the future growth potential of Badshah on a stronger trajectory. Our companies are a great fit. This transaction will enable us to accelerate our growth by adding our products to Dabur's broad portfolio to meet the needs of consumers across geographies.”
Ajay Shah, Advisor to Badshah Masala, said, “This strategic investment of Dabur brings together two strong Indian brands. This deal is growth oriented, mutually complementary, value accretive and beneficial for both the companies.”