Multi-national companies like Sodexho, Aramark and Sofra have expressed interest buying out food services firm Radhakrishna Hospitality Services. The deal to acquire the firm could be around Rs 400-450 crore, reports Economic Times. Company chairman Raju Shete has been quoted as saying that "Many firms, including Sodexho, Aramark and Sofra, have approached us for a possible buyout. But currently, we don't want to sell out. At an opportune time, if our needs are met, and if it's the right fit, we'll decide."
This development comes as Radhakrishna Hospitality recently got approval from Foreign Investment Promotion Board (FIPB), the nodal agency that clears foreign investment proposals, for conversion of an operating company into an operating-cum-holding company. Radhakrishna is India's largest food service firm with revenues around Rs 450-500 crore.
French firm Sodexo is one of the largest food services and facilities management companies in the world with a presence in 80 countries and market capitalisation 5.6 billion Euros. US-based Aramark is a food and apparel services firm, and is one of the Fortune 500 companies. Sofra is a Turkish food services firm, which interestingly has a joint venture with world's largest food service company Compass Group.
Till last year Radhakrishna Hospitality Services was operating as 50:50 joint venture with Compass Group. The companies had conflict over ownership and management control, and Radhakrishna bought the stake of Compass through debt and internal accruals. Compass had expressed interest taking over the Indian operations.
Besides food services, Rs 800 crore Radhakrishna Group also has front end retail operations under the brand Radhakrishna Foodland, which have presence in Maharashtra. Radhakrishna Foodland sold a 25% stake for $50 million to Warburg Pincus in 2003. The MNCs are vying for the food services operations which have more than 900 clients across 22 states.
