Tata Consumer Products Ltd (TCPL) has made significant strides in expanding its product portfolio by signing definitive agreements to acquire two prominent entities – Capital Foods and Organic India. The acquisition of Capital Foods, known for its brands Ching’s Secret and Smith & Jones, will be executed in phases.
TCPL will pay an enterprise value of ₹5,100 crore for a 100% stake in Capital Foods, with 75% of the equity shareholding acquired upfront and the remaining 25% to be procured within the next three years.
Simultaneously, TCPL is set to acquire 100% of Organic India in an all-cash deal amounting to ₹1,900 crore, along with an additional earnout linked to the FY26 audited financials of the company. The estimated turnover of Organic India for FY24 is projected to be ₹360 – ₹370 crore.
Capital Foods, reporting revenue from operations of ₹705.5 crore in FY23, operates in categories estimated at ₹21,400 crore. Ching’s Secret, a market leader in Desi Chinese, and Smith & Jones, catering to in-home cooking of Western cuisines, are part of Capital Foods’ strong umbrella platform brands. The acquisition aligns with Tata Consumer’s strategy to broaden its product offerings and expand its market reach.
The acquisition of Organic India, a company specializing in organic herbal teas and health foods, complements Tata Consumer’s strategic objectives in the rapidly growing health and wellness segment. With a robust organic supply chain, strong brand, and loyal consumer base, Organic India is anticipated to contribute to Tata Consumer’s momentum in the business.
The total addressable market for the categories in which Capital Foods operates is estimated at ₹21,400 crore, while the categories that Organic India is present in have a total addressable market of ₹7,000 crore in India and ₹75,000 crore in international markets.
Capital Foods, a 25-year-old company jointly owned by General Atlantic, Artal Asia Pte., Wildflower Family Trust, and founder Ajay Gupta, had seen intense competition for its ownership, with Nestle and ITC reportedly bidding aggressively.
Tata Consumer’s move to acquire these entities signifies its commitment to tapping into evolving consumer preferences, leveraging distribution strengths, and pursuing growth opportunities in the dynamic food and beverage market. The transactions are expected to accelerate business momentum and enhance Tata Consumer’s market presence.
