ITC to acquire Kolkata-based spices company Sunrise Foods for Rs 1,800-2,000 crore
ITC has signed a share purchase agreement with Sunrise Foods Private Limited to acquire the spices company with strong presence in Eastern India. Sunrise Foods has been in the market for nearly 70 years and the company has a strong portfolio of blended and natural spices. ITC will pay and estimated Rs 1,800 to 2,000 crore for acquisition of Sunrise Foods. ITC has been improving its product portfolio and pan-India presence in FMCG sector and acquisition of Sunrise Foods will give it a strong foothold in Eastern Indian market.
ITC has been trying to add profitable products to its FMCG portfolio, a move to have higher profit and sales from non-cigarette business. Spices market in North India is mainly ruled by MDH spices, Catch Spices, Everest and few other brands. Major retail chains like Reliance Retail and More have their own brands for spices. ITC currently promotes its spices under Aashirwad brand and the company claims to be in leading position in Telangana and Andhra Pradesh.
JM Financial Services was the exclusive advisor to Sunrise Foods for the deal. Subject to fulfillment of certain conditions, ITC will acquire 100% stake in Sunrise Foods Private Limited. As per a report published by VCCircle, Sunrise Foods registered net sales of Rs 400 crore for year ending March 2018 and booked net profit of Rs 41 crore for the year. The financials for last year for Sunrise Foods aren’t available. ITC has not shared the details of the deal yet but the company has confirmed about Share Purchase Agreement.
In year 2004, ITC had setup ITC Spices as a separate unit to focus on spices. The company currently handles around 35,000 metric tonnes of items annually. Packed spices and blended spices segment is growing quickly across India and industry experts feel that the market will grow in future as well.
Talking about the move, ITC official statement added, “The deal will augment the company’s product portfolio and is aligned to ITC’s aspiration to significantly scale up its spices business and expand its footprint across the country. The deep consumer connect and distribution strength of SFPL in the focus markets, together with synergies arising out of the sourcing and supply chain capabilities of the company’s agribusiness and its pan-India distribution network, will provide significant value creation opportunities for the company.”