Several Indian and global companies like Nestle, Kraft Heinz, Hindustan Unilever, Tata, ITC, and Nissin Foods are in the race to buy Capital Foods, The Economic Times (ET) on Monday reported. The buyout is estimated to be around $1-1.25 billion.
Capital Foods makes the Ching's Secret brand of spicy noodles and fusion chutneys infused with so-called "desi Chinese" flavours. It also sells Smith and Jones cooking pastes and masala mixes.
Last year, the company's three main shareholders decided to put their stake up for sale. These were Invus Group (40 per cent), General Atlantic (35 per cent) and the company's founder chairman Ajay Gupta (25 per cent).
Bloomberg last month reported that Nestle has been discussing terms of a potential deal for Capital Foods. Any transaction would likely value the firm at more than $1 billion, it said.
The ET report also added that Reliance Industries was also in the race but it is now not keen on pursuing the offer due to the steep valuation.
It's uncertain if the transaction will be all cash or part stock. However, according to the report, some potential suitors have suggested acquiring up to 75 per cent of the company and taking it public.
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Capital Foods was founded by Gupta in 1995. Kishore Biyani, CEO of Future Group, was the first external backer of the firm. He had bought a 33 per cent stake in the company for Rs 13 crore and exited it in 2013. General Atlantic came on board in 2018.
In 2021-22, the company recorded a revenue of Rs 580 crore, a 14 per cent decline as compared to FY21. In FY23, the company is expected to reach Rs 900 crore of revenue with a margin of 25 per cent.
