The acquired food business consists of 21 products, including ghee, honey, spices, juices and atta, among other things.
“The acquisition is valued at a fair market value of Rs 690 crore based on all the fixed assets of food division & respective current assets on slump sale basis,” the company said in its stock exchange filing on Wednesday.
The board of Patanjali Ayurved has also approved the transfer of the food business to Ruchi Soya Industries, effective May 9. Ruchi Soya will get the manufacturing plants located at Padartha, Haridwar, and Newasa, Maharashtra.
The payment will be made in three tranches. In the first tranche, 15 per cent (Rs 103.5 crore) of the total purchase consideration shall be simultaneously paid with the execution of the business transfer agreement or within three days from the execution of the business transfer agreement.
In the second phase, 42.5 per cent (Rs 293.25 crore) of the total purchase consideration shall be paid on the closing date defined under the business transfer agreement and in the third tranche, the remaining 42.5 per cent (Rs 293.25 crore) of the total purchase consideration will be paid within 0 days from the closing date. The transaction is expected to complete by July 15.
“This strategic initiative for acquisition of food business shall strengthen its food product portfolio with an array of brands and also contribute to the growth in terms of revenue and EBITDA,” the company said in the stock exchange filing. Adding, “With this acquisition, the company also informed that it has reaffirmed its position to be a strong FMCG company in its journey towards becoming a major player in the FMCG space as committed to its shareholders at the time of its maiden FPO.“
On April 10, The board of directors of Ruchi Soya Industries decided to change the company’s name to Patanjali Foods.
