FMCG major Dabur India on Wednesday said it will acquire a 51 per cent stake in Badshah Masala Private Limited, the owners of the Badshah Masala brand which is engaged in the business of manufacturing, marketing and export of ground spices, blended spices and seasonings.
Announcing that it has signed definitive transaction agreements, Dabur said the acquisition is in line with its strategic intent to expand its foods business to Rs 500 crore in three years and into new adjacent categories. Dabur will acquire the balance 49 per cent shareholding after five years.
“Dabur is acquiring 51 per cent 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,” the company said in a statement. This translates to a revenue multiple of around 4.5x and Ebitda (earnings before interest, tax, depreciation and amortisation) multiple of around 19.6x of financial 2022-23 estimated financials. The transaction is expected to be cash EPS neutral in the first year and accretive thereafter. The acquisition also marks Dabur’s entry into the over Rs 25,000-crore branded spices and seasoning market in India.
“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,” Mohit Burman, chairman, Dabur India, said. FE
