Scheme of arrangement between Tata Consumer, Tata Coffee, TCPL Beverages to be effective Jan 1
With the scheme of arrangement becoming effective on January 1, 2024, Tata Coffee will get dissolved without winding-up.
In two back to back deals, Tata Consumer Products on Friday stated it will acquire up to 100 per cent stake in Organic India, a Fabindia-owned business that sells tea, infusions, herbal supplements and packaged foods, for Rs 1,900 crore in an all cash deal.
“The Board of Directors approved the acquisition of up to 100 per cent of the equity share capital of Organic India Private Ltd. The company, thereafter, has entered into a share purchase agreement (SPA) with Fabindia Ltd to acquire up to 100 per cent of the company’s equity share capital,” Tata Consumer Products said in an exchange filing.
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The announcement came shortly after Tata Consumer Products’ first acquisition of the day, where it said it will buy 100 per cent stake in Capital Foods, which markets its products under Ching’s Secret and Smith & Jones brands, for Rs 5,100 crore in an all cash deal.
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Estimated turnover of Organic India for FY24 is approximately Rs 360 to Rs 370 crore. In the last three fiscals, the company has seen a gradual decline in sales from Rs 394.8 crore in FY21 to Rs 324.4 crore in FY23.
The deal values the company at a little over five times its FY24 sales. Against FY23 sales, the company is valued at nearly six times its sales. Tata Consumer is valued at 12 times its FY23 sales and 11.5 times its FY24 (annualised) sales.
The Total Addressable Market (TAM) for the categories that Organic India is present in is Rs 7,000 crore in India and Rs 75,000 crores in international markets where Tata Consumer has a strong presence, the company said.
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