Tata Consumer Products has entered into a share purchase and investment agreement with the existing promoters and shareholders of Kottayam Agro Foods, to acquire 100% equity share capital of the latter.
Kottaram Agro Foods is engaged in the business of breakfast cereals and millet-based snacks under the trademark "Soulfull".
The acquisition is expected to complete on or before March 31, 2021.
The transaction is for a consideration of Rs155.8cr. Additionally, the promoters are entitled to a contingent consideration, which is payable upon the business achieving certain operational and financial milestones over 5 years.
This move is consistent with TCPL's strategic intent to expand its product portfolio and participate in multiple consumption occasions.
Sunil D'Souza, MD & CEO, Tata Consumer Products said, "This acquisition is a good strategic fit for Tata Consumer Products. It opens to us significant new market opportunities in the fast-growing mini-meals segments and helps us partner a passionate and ambitious team of entrepreneurs who will remain and become a part of the Tata Consumer Products team. Soulfull synergizes well with our existing product portfolio, our distribution network as well as the supply chain. We believe Tata Consumer is well-positioned to unlock the full potential of the "Soulfull" brand and scale up its presence given the growing consumer need of healthy and convenient food options that they can trust."
Prashant Parameswaran, MD & CEO, Kottaram Agro Foods said, "We are extremely proud to associate with Tata Consumer Products which provides us with a great platform for furthering Soulfull's purpose of making ancient millets relevant for the 21st century. Tata Soulfull will enhance the brand's credibility and make health more accessible and mainstream while retaining its vibrancy. The Tata brand is one that has always inspired me and fits perfectly with the values of Soulfull. This partnership would enable us to not just scale our existing business but also enter new categories in the fast-growing health and wellness market."
Furthermore, This acquisition will allow TCPL to expand its product portfolio into the fast-growing 'on the table' and (on the go' categories and to participate in newer consumption occasions. There are also significant synergies possible with the existing business of TCPL in areas spanning distribution, procurement, and logistics. Additionally, the TATA name would further enhance the brand's credentials with consumers.