Tata Consumer Products Broadens Horizons with Capital Foods and Organic India Acquisitions

In a strategic move, Tata Consumer Products Ltd (TCPL) has made substantial strides in the consumer goods market with the acquisitions of Capital Foods, renowned for the Ching's Secret brand, and Organic India, backed by Fab India, amounting to a combined enterprise value of Rs 7,000 crore.

TCPL's Acquisition Details:

• Capital Foods Acquisition:

TCPL is set to acquire 100% equity shares of Capital Foods, including popular brands like Ching's Secret and Smith & Jones, at an enterprise valuation of Rs 5,100 crore.

• The Share Purchase Agreement and Shareholders' Agreement secure 75% equity shareholding in Capital Foods through an all-cash deal, with the remaining 25% expected to be acquired within three years.

• Expected completion of 75% equity shareholding acquisition before March 31, 2024.

• Organic India Acquisition:

TCPL is on track to acquire Organic India, a significant player in the health and wellness category, at an enterprise value of Rs 1,900 crore.

• The acquisition is anticipated to be completed within three months and is an all-cash deal.

Strategic Implications:

• Transformation into a Comprehensive FMCG Company: The acquisitions align with TCPL's strategic goal of transforming into a comprehensive fast-moving consumer goods (FMCG) company.

• Diversification into Packed Food Segment: The move enables TCPL to diversify its portfolio into the packed food segment, capitalizing on the strengths of the acquired brands.

Financial Outlook:

• Revenue and Valuation: Capital Foods, with a revenue of Rs 705.5 crore for the financial year ended March 31, 2023, is poised to fortify TCPL's product portfolio.

• Enterprise Value: The combined enterprise value of Rs 7,000 crore signifies the magnitude of TCPL's commitment to growth and expansion in the consumer goods sector.

Leadership Perspectives:

• Sunil D'Souza, MD and CEO of TCPL: Expresses confidence in the strong brand recall of Ching's Secret and Smith & Jones, foreseeing the acquisitions driving topline growth and realizing cost synergies.

• Ajay Gupta, Founder of Capital Foods: Views the collaboration with Tata as an opportunity to create a multinational culinary brand across various food categories.

Strategic Vision and Commitment:

TCPL's acquisition strategy underscores its commitment to exploring high-growth and attractive margin categories in the food and beverage space. The move is aimed at establishing a robust health and wellness platform while solidifying its position in the dynamic consumer goods landscape.