Foods and Inns Ltd (FIL), a producer of fruit and vegetables pulp as well as puree, has acquired Kusum Spices, which sells its products under the Kusum Masala brand.
In a filing with stock exchanges, Mumbai-based Foods and Inns said it had acquired 99.99% of Kusum for Rs 14 crore (about $2 million at current exchange rate) cash.
Foods and Inns said it is buying the Kusum brand and entering into a partnership with Kusum Spices, which reported revenues of Rs 17.16 crore for 2018-2019 financial year.
In a statement, Foods and Inns chairman Bhupendra Dalal said the acquisition was in line with the company’s business strategy of inorganic buys to drive its growth, adding that it would also help the firm transition from being a business-to-business entity to a branded business-to-customer company.
Shares of Foods and Inns were trading 1.52% up at about Rs 47 apiece at the time of writing this report.
Kusum, promoted by Shard Kusumchandra Shah, also exports its products such as red chili and turmeric powder to parts of the Gulf and Africa. The company is also looking to shift its production factory to Nashik from Mumbai’s Goregaon.
According to its website, Foods and Inns was founded in the 1940s, and originally began operations as a supplier of canned foods to Allied forces during World War II. Its products include various fruit and vegetable concentrates and purees, with its customers including corporates such as Coca-Cola and PepsiCo.
There has been some strategic interest in spice firms in recent years, especially as the segment commands a strong export position when it comes to the larger fast-moving consumer goods segment.
For example, last year, VCCircle reported that the RP-Sanjiv Goenka Group was in the initial stage of discussions to acquire a South India-based spices firm. A person familiar with the developments said that the group was looking to boost its distribution network in the eatables category.