The deal amount is estimated to be Rs 300 crore
Actis hasformed a new management team for Nilgiris
The dealwould be in the form of a management buy-in by the private equity firm.
New Delhi/Bangalore, Sept. 1
The UK-based private equity firm Actis is all set to pick up controlling stake in the Bangalore-based, family-run Nilgiris Dairy Farm. According to sources, the deal amount is estimated to be in the region of about Rs 300 crore and would be in the form of a management buy-in by the private equity firm.
When contacted, Mr C. Gopalakrishnan, Director, The Nilgiri Dairy Farm Ltd, confirmed that negotiations were on to sell stake, adding that most of the family members have already signed the deal with Actis. He, however, added that he himself was yet to take a call on selling his personal stake, stating that he would take a final decision during a franchise meet which is due to take place after a few days.
Financial institutional sources added that Actis has formed a new management team for Nilgiris. Interestingly, Mr N.C. Venugopal, who was till earlier this year the Managing Director of Lotte India Corporation Ltd (formerly Parrys Confectionery), is heading the team and may also be part of the top management of the company.
Meanwhile, sources said that though the exact stake that Actis is purchasing is not known, it would amount to over 51 per cent and will be purchased from the family members who own Nilgiris.
They added that Actis will work along with the family members post the completion of the transaction and that employees at other levels in the company would remain unaffected.
The deal would include control of the Nigiris brand, apart from the company's manufacturing and warehousing business. Nilgiri's is one of the oldest supermarket chains in the country with its origins dating back to 1905.
Unlike other chains in the country, which do not produce any goods of their own, nearly half of the sales in the Nilgiri's supermarkets is contributed by its own food products in the dairy and bakery segments.
The transaction would also mark Actis' second management buy-in in the country after Phoenix Lamps. Actis had roped in ex-Nokia Managing Director, Mr Sanjeev Sharma, to head the Actis team for Phoenix Lamps, an auto components manufacturer.
Actis has raised about $475 million to invest in the Indian market.
The firm had indicated earlier that it plans to invest about $100-125 million every year, though the figures may vary depending on the actual size of deals struck.
The private equity firm's other investments in India include Punjab Tractors, Paras, Glenmark Pharma and Jyothi Labs.Related Stories:
Nilgiri's in talks to offload stake