An early investor in Nashik Vintners Pvt Ltd, which runs Sula Vineyards, has made a partial exit as the company has roped in a Belgian family office as a new investor. Verlinvest SA, a fund created by the three founding families of beer conglomerate Anheuser-Busch InBev, is picking up a stake in Nashik Vintners for $15 million, sources confirmed to VCCircle.
The new funds will be used to expand the sales and marketing initiatives, besides building an ecologically friendly winery with a capacity of four million litres in Maharashtra.
The deal marks a partial exit for GEM India Advisors, which picked up a 30-35% stake in the firm for Rs 15 crore in early 2005. While the stake acquired by Verlinvest was not disclosed, media reports put the figure at 15%. This would mean that the valuation of the wine maker, which owns brands like Sula and Samara, has increased by more than 10 times since GEM's investment. While the GEM investment would have valued Nashik Vintners at around Rs 43-50 crore, the present deal would put the valuation at around Rs 470 crore ($100 million).
Rajeev Samant, Founder and CEO of Sula Vineyards, said, “Verlinvest's operational expertise and strong network will further help propel Sula." The Samant family continue to be the largest shareholders in Sula and did not divest any shares as part of the transaction.
Nashik Vintners is promoted by Rajeev Samant, who studied at Stanford University and worked in Oracle before coming back to India to ultimately start Sula. The Samant family continues to be the largest shareholder in Sula and did not divest any shares as part of the transaction.
“India, a growth economy with fast changing consumer trends is among the largest consumer markets in the world. We believe that the young Indian wine industry is likely to double in the upcoming years. Verlinvest is very pleased to support the development of Sula Vineyards and its skilled management team,” said Frédéric de Mevius of Verlinvest, who has also invested in Budweiser-maker Anheuser-Busch InBev and French liquor maker Rémy Cointreau.
"From a macro perspective, Indian wine industry is a great consumption story riding on many secular themes," said Deepak I. Shahdadpuri, Managing Director of Baer Capital Partners. Shahdadpuri was the Founder and Managing Director, GEM India Advisors, the first institutional investor in Nashik Vintners. He currently advises GEM India Advisors on the investment.
Shahdadpuri asserted that they are long term partners in Sula Vineyards' growth story and part-sold the stake only because the new investors wanted a larger share of the pie. The PE firm also exited partially in 2007 only "to create room for other value added partners to come in", according to Shahdadpuri. In 2007, Indivision I acquired 20% stake for $12.50 million in the company, which included primary capital infusion and secondary stake acquisition from GEM India Advisors, which continues to hold "significant" shareholding in the winemaker.
“We have worked closely with Rajeev Samant over the last six years and will continue to provide the support he requires to take the business to the next level”, added Shahdadpuri.
Sameer Sain, Managing Partner, Everstone Capital, said, with the fund infusion, Sula is "well prepared" to take advantage of the wine explosion.
Investors in Nashik Vintners include Everstone Capital's Indivison India Partners, Haystack Investments and ICP Holdings.