US-based private equity firm Advent International has inked a deal to take control of Indian snacks maker DFM Foods Ltd in a deal that will provide homegrown investor WestBridge Capital an exit opportunity.
Advent has agreed to acquire almost 68% of DFM Foods from promoters and WestBridge for Rs 851.67 crore ($118.8 million) and has made an open offer to buy up to 26% from the company's public shareholders, the Indian company said in a stock-exchange filing.
Advent is making the open offer at Rs 249.50 per share. That's 7.66% lower than the company's closing share price of Rs 270.20 on the BSE on Monday. Assuming full acceptance of the open offer, Advent will shell out Rs 326.11 crore.
This means that the PE firm will spend as much as Rs 1,177.78 crore (about $164 million) to own 94% of Delhi-based DFM Foods.
DFM Foods sells salted snacks under the Crax brand. WestBridge had first invested in DFM in 2014 and owns a 24.8% stake. In September last year, VCCircle had reported that DFM was planning to raise capital via a share sale to scout for acquisitions.
For Advent, this is the second India deal in less than a week. Last week, the PE firm agreed to invest Rs 1,000 crore in non-bank lender Aditya Birla Capital Ltd.
Advent has been active in India since 2007 and had invested nearly $1 billion in India prior to the deal with Aditya Birla Capital. The firm’s most recent deal in India was the buyout of Manjushree Technopack in October 2018. Prior to that, Advent had picked up a significant majority stake in innerwear maker Dixcy Textiles Pvt. Ltd in 2017.
The deals with Aditya Birla Capital and DFM come shortly after the PE firm raised $17.5 billion for its ninth global fund in June. At the time, Shweta Jalan, a managing director at Advent and head of India business, had said the fundraising increased the amount of capital that might be deployed in India.