Tata Consumer Products expands portfolio with Capital Foods, Organic India acquisitions

TCPL acquisition: Tata Consumer Products Ltd (TCPL) has made significant strides in the competitive consumer goods market with the acquisition of Capital Foods, known for the popular Ching's Secret brand, and Organic India, backed by Fab India, for a combined enterprise value of Rs 7,000 crore.

TCPL's strategic move involves acquiring 100 per cent equity shares of Capital Foods at an enterprise valuation of Rs 5,100 crore. The deal includes renowned brands like Ching’s Secret and Smith & Jones. Additionally, TCPL is set to acquire Organic India, a player in the health and wellness category, at an enterprise value of Rs 1,900 crore.

The acquisition aligns with TCPL's transformation into a comprehensive fast-moving consumer goods (FMCG) company, enabling the expansion of its portfolio into the packed food segment.

In a Share Purchase Agreement and Shareholders’ Agreement, TCPL has secured the acquisition of 75 per cent equity shareholding of Capital Foods in an all-cash deal, with the remaining 25 per cent expected to be acquired within three years.

The acquisition of Organic India, expected to be completed within three months, is also an all-cash deal.

TCPL foresees completing the acquisition of 75 per cent equity shareholding in Capital Foods before March 31, 2024.

Capital Foods, with a revenue of Rs 705.5 crore for the financial year ended March 31, 2023, is expected to fortify TCPL's product portfolio and enhance its pantry platform. The acquisition is estimated to unlock synergy benefits in distribution, logistics, exports, and overheads, apart from contributing to portfolio premiumization and expanding into additional channels and new markets.

MD and CEO of TCPL, Sunil D’Souza, expressed confidence in the strong brand recall of Ching’s Secret and Smith & Jones, foreseeing the acquisition driving topline growth and realizing cost synergies.

Capital Foods founder, Ajay Gupta, sees the collaboration with Tata as an opportunity to create a multinational culinary brand across multiple food categories.

TCPL's acquisition strategy reflects its commitment to tapping into high-growth and attractive margin categories in the food and beverage space, establishing a health and wellness platform, and reinforcing its position in the evolving consumer goods landscape.