Future Ventures Ltd, an investment and business management firm modelled after Berkshire Hathway, has struck a twin deal to re-invest in two existing portfolio firms – Capital Foods Exportts and Aadhaar Retailing.
Future Ventures, which went public three months ago, has bought shares of Capital Foods from majority stake owner Ajay Gupta and has also subscribed to additional shares through a preferential allotment for an undisclosed sum.
“With this acquisition and subscription, Future Ventures India Ltd’s stake has increased to 43.76 per cent of the equity share capital of Capital Foods,” the company has disclosed on Friday.
Future Ventures held 40.8 per cent in Capital Foods as per its IPO prospectus, filed in mid-April this year. The investment firm had acquired the stake from Indivision Partners in February, 2010, for around Rs 45.11 crore or $10 million.
Capital Foods is into processed foods business and markets under the brand of Ching’s Secret, Smith & Jones and Kaeng Thai, among others. And the product categories include instant noodles, spices and sauces, etc. For the nine-month period ended December 31, 2010, Capital Foods Exportts had sales of Rs 12.24 crore and net profit of Rs 5.65 lakh.
Future Ventures has also made an additional investment of Rs 20 crore by subscribing to two million zero-coupon optionally convertible debentures of Aadhaar Retailing, a rural and semi-urban retailer of agricultural products and consumer products including apparel, seeds, fertilizers and FMCG goods.
Future Ventures held 70 per cent stake in Aadhaar Retailing as of April this year. It had purchased the stake for Rs 30.18 crore from its promoter Godrej Agrovet in March, 2008. It had also invested more money in the firm in January, 2010, and March, 2010, but that did not change its holding as other shareholders also re-invested.
Aadhaar operated 51 exclusive outlets, as of February 28, 2011. For the nine-month period ended December 31, 2010, the retail and distribution firm had aggregate sales of Rs 47.41 crore and a loss of Rs 18.84 crore.
These two investments comes in the wake of similar moves by Future Ventures in the past few months when it has become quite active in raising its holdings in existing portfolio firms. Last month, it has acquired an additional 5.14 per cent stake in the designer, manufacturer and retailer of readymade garments Indus League, to up its holding to 90.84 per cent for an undisclosed amount. Indus-League has brands like Indigo Nation, John Miller, Scullers and Urban Yoga, with a market presence in India, Sri Lanka, the Middle East, the UAE and Bahrain.
In July this year, it also acquired 30 per cent stake ‘from existing promoters’ of the edutainment media firm Amar Chitra Katha Pvt Ltd (ACK), increasing its holding to 56 per cent and making ACK its subsidiary. However, the deal size has not been disclosed.
In April this year, Future Ventures had picked up a little over 26 per cent stake in ACK for Rs 37.5 crore, valuing the firm at Rs 140 crore. AIM-listed and India-focused private equity firm Elephant Capital also holds another 26 per cent stake in ACK.