Capital Foods owns Ching's Secret and Smith & Jones, and Organic India is a tea and ayurvedic health supplements company.
Tata Consumer Products (TCPL) is poised to unveil two significant deals – the takeover of Capital Foods, renowned for producing condiments, food items, and ingredients with brands like Ching's Secret and Smith & Jones, and the acquisition of Organic India, a Fabindia-supported manufacturer of organic teas and health products.
This move concludes months of negotiations, according to sources familiar with the matter, as reported by The Economic Times. The official announcement is expected to be made early next week.
The acquisition assumes significance as it will help the company get access to products with a more extensive taste profile, enabling entry into new markets and diversifying its portfolio with organic items.
TCPL is set to acquire a 75% stake in Capital Foods from existing investors, including Invus Group holding a 40% stake, and the US private equity group General Atlantic, which owns 35%, valuing the company at Rs 5,100 crore. This would place the stake value at Rs 3,825 crore.
Meanwhile, Ajay Gupta, founder chairman of Capital Foods will maintain his 25% stake for the time being. Tata plans to buy the remaining stake from him in the future.
TCPL will acquire a controlling stake in Organic India from Fab India, valuing the company at Rs 1,800 crore. Fabindia, supported by Premji Invest and Lighthouse Capital, holds over a 40% stake in Organic India, which is headquartered in Lucknow.
Tata's acquisition will now position TCPL in direct competition with Nestle's Maggi, the leader in the Rs 5,000 crore branded instant noodles market, commanding a 60% share.
Capital Foods' portfolio will benefit significantly from Tata Consumer's robust distribution network and formidable marketing capabilities, according to an official closely associated with the development.