In line with its strategy to scale up its food business, Dabur India is set to acquire a 51 per cent stake in packaged spices company Badshah Masala Pvt Ltd in a deal pegged at ₹587.52 crore. This marks the company’s foray into the ₹25,000 crore-branded spices segment with a slew of national and regional players.
“Dabur is acquiring 51 per cent stake in Badshah for ₹587.52 crore, less proportionate debt as on the closing date, with the Badshah enterprise being valued at ₹1,152 crore,” it said. The acquisition is expected to be closed within this fiscal with plans to acquire the balance 49 per cent stake after five years, it added.
Mohit Burman, Chairman of Dabur India Ltd, said, “This acquisition will accelerate our growth strategy as we continue to build our foods business. We intend to leverage our international market presence to grow this business globally.”
Founded in 1958, Badshah Masala has two manufacturing facilities in Gujarat and sells ground spices, blended spices and seasonings in India and international markets.
Mohit Malhotra, CEO of Dabur India, told businessline, “ It is our strategic intent to scale up our food business to ₹500 crore in three years. India is fast shifting from non-branded to branded segment. So we want to leverage on this tailwind by getting into adjacent categories that are not dilutive to our existing margins and where we have the right to win. One of the attractive categories which we identified is the spices segment, which is growing at healthy double-digits. “
Badshah Masala is a leading player in the spices and condiments segment with a significant presence in Gujarat, Maharashtra and Telangana.
“The Badshah portfolio will gain from Dabur’s extensive distribution reach and we will unlock further synergies to capture the full potential of this business. Blended spices account for nearly 82 per cent of Badshah’s revenue, which has better margins than pure masalas. We aim to grow this business at roughly 20 per cent CAGR,” Malhotra added.