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Dabur acquires majority stake in Badshah Masala for ₹587.5 crore

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  • The acquisitions dabur‘s entry into the more than ₹25,000 crore branded spice and spice market in India.
  • mohit BurmeseChairman of Dabur India said they plan to leverage their global market presence to grow the company globally.
  • The transaction is expected to be cash EPS neutral in the first year and positive thereafter, the company said.

Dabur India has announced that it has today signed definitive agreements to acquire 51% shares of Gujarat-based spice maker Badshah Masala for ₹587.52 crores.

Badshah is engaged in the manufacture, marketing and export of ground spices, mixed spices and seasonings.

“The Indian spices and herbs category is a large and attractive market. Badshah Masala is one of the key players in this space. Our investment in Badshah Masala will help expand this business and continue to provide products of unparalleled quality,” said Mohit Burman, President of Dabur India.

The company said the acquisition is in line with Dabur’s strategic intent to expand its food business to ₹500 crores in three years and expand into new adjacent categories. “This also marks Dabur’s entry into the more than 25,000 crore branded herbs and spices market in India,” Dabur said in a press release.

Dabur will acquire the majority stake for ₹587.52 crores, less proportionate debt as of the closing date. The deal values ​​the company at ₹1,152 crores. This translates into a revenue multiple of approximately 4.5x and an EBIDTA multiple of approximately 19.6x of the estimated financial numbers in FY2022-23.

“The transaction is expected to be cash-EPS neutral in year one and contributing thereafter. The acquisition is expected to close within this fiscal year. Under our agreement, we will acquire the remaining 49% of the shares after 5 years”, PD Narang, Group Director, Dabur India.

Burman said they plan to leverage their global market presence to grow the company globally.

“This transaction enables us to accelerate our growth by adding our products to Dabur’s broad portfolio to meet the needs of consumers in different regions,” Hemant Jhaveri, Managing Director of Badshah Masala.

According to Mohit Malhotra, CEO of Dabur India, the branded spices market in India is growing at a healthy double digit rate, led by increasing consumption, upgrading from unbranded to proprietary and growing preference for regional flavors across all states.

“The market is dominated by regional players and has significant growth potential going forward. Badshah’s portfolio will benefit from Dabur’s expanded distribution reach. We look forward to unlocking further synergies and market opportunities to unlock the full potential of Badshah Masala,” added Malhotra.

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