Will subsequently make an open offer to acquire up to an additional 26% of the Company’s shares from public shareholders
Advent International, global private equity investors has announced that it has signed definitive agreements to acquire a majority interest in DFM Foods Ltd, manufacturer, marketer and distributor of packaged snack foods in India, from its promoters, WestBridge Crossover Fund, LLC and its subsidiaries, and certain other individual shareholders.
Under the agreements, Advent will purchase up to 34.1 million DFM shares, representing up to 68% of the Company’s outstanding stock on a fully diluted basis, from the Selling Shareholders at a price of INR 249.50 per share. With the sale of shares, DFM’s promoters and WestBridge will fully exit their investments in the Company.
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 three to four months.
With manufacturing facilities in Ghaziabad and Greater Noida, DFM sells its products through an extensive distribution network spanning the entire country. Over the last 10 years, the Company’s sales and EBITDA have grown at a compound annual rate of 21% and 24%, respectively, making it one of the fastest-growing companies in its category.
Shweta Jalan, a Managing Director and Head of India at Advent International said, “DFM is a leader and innovator in a large, fast-growing segment of the Indian food and beverage industry. The Company has strong brand awareness and distribution and numerous opportunities for continued growth. We are excited to partner with DFM to help drive its next phase of expansion.”
Mohit Jain, Chairman and Managing Director of DFM Foods said, “Over the past 35 years, we have established a position as one of India’s leading snack food providers, bringing excitement to people’s lives through our innovative, high-quality snacks and brands. We appreciate the support we have received from WestBridge Capital in expanding the company over the past five years and welcome Advent International as DFM’s new majority shareholder to help drive continued growth and consolidate the business in the future.”
Sahil Dalal, a Director at Advent in Mumbai said, “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.”
Sandeep Singhal, Co-founder and Managing Director of WestBridge Capital said, “The Founders at DFM have created a company known for its quality products, loved brands and robust distribution. It has been a wonderful journey to see the business grow from strength to strength over the last five years. We wish the Founders, Company and Advent the best of luck for the future.”
Advent Operating Partners V.L. Rajesh and Manu Anand helped Advent to evaluate the investment opportunity and will continue to advise Advent and DFM on the development and execution of the value creation plan for the business going forward.
Rajesh is the former CEO and COO of ITC Foods & Anand was most recently President of the Chocolate Business at Mondelēz International in Asia, the Middle East and Africa.
ICICI Securities Limited is serving as financial advisor to Advent International and is managing the open offer. KPMG is acting as exclusive financial advisor to DFM Foods.