ITC to acquire spice manufacturer Sunrise Foods; to augment product portfolio, boost FMCG revenue by 7%

ITC, the consumer goods giant, is going to acquire spices maker Sunrise Foods Private Limited, the company said in a statement to stock exchanges on Sunday.

Pic courtesy: CNBC-TV18

ITC Ltd has entered into a share purchase agreement (SPA) to acquire 100 percent of the equity share capital of Sunrise Foods Private Limited (SFPL), a company primarily engaged in the business of spices under the trademark “Sunrise”, the Kolkata-based company said.

In a regulatory filing, ITC said that the proposed acquisition will augment its product portfolio and is aligned to the company's aspiration to significantly scale up its spices business and expand its footprint across the country.

ITC
Enters Spices Biz🌶

What it means for them
- Additional 7% to FMCG Revenue
- Margin Accretion in FMCG (15-16% EBITDA Margin Biz)

ITC Cash on Books at
~3300 Cr

Reports Suggest
- Bought biz b/w ~2000-2500 Cr
- Valued at 2-2.5X Sales @ITCCorpCom #FMCGisLife@CNBCTV18Live https://t.co/YITQ6y4B5V

— Mangalam Maloo (@blitzkreigm) May 24, 2020

The size of the deal was not revealed.

"ITC Limited has entered into a Share Purchase Agreement (SPA) on 23 May, 2020 to acquire 100 percent of the equity share capital of Sunrise Foods Private Limited (SFPL), a company primarily engaged in the business of spices under the trademark 'Sunrise', subject to fulfilment of various terms and conditions as specified in the SPA," it said.

It also noted that ITC's Aashirvaad range of spices is already a market leader in Telangana and Andhra Pradesh.

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 ITC's agri business and its pan-India distribution network, will provide significant value creation opportunities for the company, it said.

 

--With inputs from agencies

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