Chennai-based private sector dairy firm Hatsun Agro Product Ltd (HAPL) is acquiring milk dairy products manufacturer Jyothi Dairy, as per a stock market disclosure. HAPL will invest Rs 65 crore for making a fresh investment and buying the dairy firm.
At the company's meeting held on Wednesday, it approved, "The declaration of interim dividend of Rs 1.50 (150 per cent) per equity share for the financial year 2013-14 and in-principle approval for the acquisition of the business of Jyothi Dairy in Andhra Pradesh and further investment in it for Rs 65 crore ($10.6 million)."
The deal is closed but the details are expected to be released by the first week of November.
"It will help us in expanding our business operations in Andhra Pradesh," said RG Chandramogan, managing director of HAPL.
T Balaji, managing director of Jyothi Dairy confirmed the deal and said HAPL will help the firm expand and use the existing infrastructure.
Established in 1992, Jyothy Dairy has its operations throughout Andhra Pradesh with production facilities in Hyderabad and Chittoor and milk collections facilities at 10 locations in AP. It offers double toned milk, homogenised toned milk, toned milk, milk and whole milk.
Hatsun Agro’s offerings range from liquid milk under the brand name Arokya, ice cream under the brand Arun Icecreams and a range of dairy products, including ghee, butter, dairy whitener and milk powder. It has a strong market positioning with its flagship brands Arokya and Arun Icecreams in southern India.
The company's sales grew from Rs 21.27 crore in 1997-98 to Rs 1604.70 crore in 2011-12 while PBDITA increased from Rs 2.5 crore in 1997-98 to Rs 112.46 crore in 2011-12.
In May this year, VCCircle reported that Hatsun Agro Product is looking to raise over $30 million (Rs 168 crore) in PE funding.
In this space, in February this year, Nestle India Ltd had entered into a definitive agreement to acquire 26 per cent stake in Indocon Agro and Allied Activities Pvt Ltd for an undisclosed amount. Hyderabad-based Tirumala Milk Products Pvt Ltd renewed its stake sale plans after talks with French-foods major Danone SA was called off earlier this year.
IFC backed Modern Dairies in the segment, while Prabhat Dairy raised private equity funding from Rabo Equity Advisors last year.
(Edited by Joby Puthuparampil Johnson)