Tata Consumer signs deal to buyout Capital Foods for Rs 5,100-crore enterprise value

MUMBAI - Tata Consumer Products on Friday said the company has signed an agreement to acquire packaged foods maker Capital Foods at an enterprise value of Rs 5,100 crore.

Under the deal, Tata Consumer will acquire 75% stake in Capital Foods, and the balance 25% will be purchased within 3 years, the Tata Group company said in an exchange filing.

The Economic Times had reported quoting sources that the Tata Group firm is likely to acquire the maker of sauces and other packaged foods under the Ching’s brand.


Tata Consumer plans to complete the acquisition of 75% stake by March 31, subject to fulfillment of terms and conditions.

“The acquisition is in line with the company's strategic intent of entering into new adjacent high
growth/attractive margin categories in the food and beverage space,” Tata Consumer said.

Capital Foods clocked in revenue of Rs 706 crore in 2022-23 (April-March), compared to Rs 574 crore a year ago. As of March 31, 2023, its networth was Rs 312 crore.

The company has a strong portfolio of unique products for in-home consumption in fast growing categories under the ‘Ching’s Secret’ and ‘Smith & Jones” brands.

Ching’s Secret is a market leader in desi Chinese across its product categories - Chutneys, blended masalas, sauces and soups.

Smith & Jones is a fast-growing brand catering to in-home cooking of Italian and other western cuisines.

“This acquisition will enable Tata Consumer to expand its product portfolio and further strengthen its pantry platform,” the company said.

Further, there are significant synergy benefits with the existing businesses of Tata Consumer in areas spanning distribution, logistics, exports and overheads, it added.

The overall size of the categories in which Capital Foods operates in, is estimated at Rs 21,400 crore.

“We believe this is a good strategic and financial fit. It will open up significant market opportunities in the fast-growing non-Indian cuisines segment, leveraging the sales and distribution platform that we have built,” Tata Consumer MD & CEO Sunil D’Souza was quoted as saying in the release.

D’Souza expects the deal to accelerate momentum in business and be margin accretive.

Kotak Investment Banking and Khaitan & Co were the financial and legal advisers to Tata Consumer in the deal.

On Friday, shares of Tata Consumer ended 3.6% higher on the National Stock Exchange following the reports of acquisition. Intraday, the stock also scaled a lifetime high of Rs 1,165.55.

(Subscribe to ETMarkets WhatsApp channel)