PE firm Advent International to take control of Crax maker DFM Foods

Our Bureaus New Delhi/Mumbai | Updated on September 09, 2019 Published on September 09, 2019

The deal will provide WestBridge Capital an exit opportunity

US-based private equity firm Advent International Corporation is set to acquire a controlling stake in home-grown snacks maker DFM Foods Pvt Ltd that owns brands such as Crax and Natkhat.

The stake is being bought from WestBridge Crossover Fund, LLC and its subsidiaries, and certain other individual shareholders. The deal will vary between ₹852 crore and ₹938 crore ($118-130 million) depending on the open offer subscription.

Under the agreements, Advent will purchase up to 34.1 million DFM shares, representing up to 68 per cent of the company’s outstanding stock on a fully diluted basis, at a price of ₹249.50 per share.

The deal will provide DFM’s promoters and WestBridge an exit opportunity.

In accordance with the Securities and Exchange Board of India regulations, Advent will make an open offer to DFM’s public shareholders to purchase up to an additional 26 per cent at a price of ₹249.50 per share.

Depending on the open offer subscription, the aggregate consideration for the purchase of shares will vary between ₹852 crore and ₹938 crore. DFM’s shares closed at ₹270 a piece on BSE on Monday.

The transaction, Advent’s seventh investment in India in the past four years, is subject to customary closing conditions and is expected to be completed in 3-4 months.

“The food and beverage market in India is a fragmented, regional industry, and we look forward to working with DFM to build a larger and broader food and beverage business through further organic growth and targeted M&A,” said Sahil Dalal, a Director at Advent in Mumbai.

Meanwhile, AI Global Investments (Cyprus) PCC Ltd is making an open offer at ₹249.50 per equity share to additionally acquire up to 26 per cent of the expanded voting share capital in the company.

Published on September 09, 2019

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