Dabur To Acquire 51% Stake In Badshah Masala

FMCG major Dabur is set to acquire 51 per cent stake in Badshah Masala Pvt Ltd for a cash consideration of Rs 587.52 crore. 

Dabur Ltd will acquire the remaining 49 per cent stake after a period of five years, the company said.

The acquisition is in line with the company's strategic intent of entering into new adjacent categories in the food space, Dabur said.

"Dabur has entered into a share purchase agreement("SPA") and shareholders agreement ("SHA") on 26 October, 2022 with the existing promoters and shareholders of the Badshah Masala Pvt Ltd (Target Company) for the acquisition of 51% equity shareholding of the Target Company from its various shareholders (balance 49% to be acquired after a period of 5 years). Upon acquisition, the Company will add ground spices, blended spices, and seasonings in its portfolio. The acquisition is in line with the Company's strategic intent of entering into new adjacent categories in the food space," Dabur said in its filing.

The cost of acquisition of has been agreed at Rs 587.52 crore, said the company.

“Cost of acquisition of 51 percent equity shareholding has been agreed at Rs 587.52 crore less proportionate debt as on the closing date (100 percent enterprise valuation being Rs 1,152 crore which translates to revenue multiple of around 4.5x and EBIDTA multiple of around 19.6x of FY2022-23 estimated financials)," Dabur added in its filing.

"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," said Mohit Burman, Chairman, Dabur India Ltd.

Dabur India Ltd on Wednesday reported a 2.85 per cent decline in its consolidated net profit to Rs 490.86 crore for the September quarter from Rs 505.31 Cr reported in the correposnding quarter last fiscal.

Its revenue from operations rose 6 per cent to Rs 2,986.49 crore during Q2FY23 against Rs 2,817.58 crore a year ago.