Fast-moving consumer goods (FMCG) major Marico Ltd will acquire a majority stake in premium popcorn brand 4700BC from multiplex chain operator PVR Inox.
PVR Inox had initially acquired a 70% stake in Delhi-based 4700BC Popcorn, operated by Zea Maize Pvt Ltd, in 2015 for Rs 5 crore ($760,000 then), valuing the company at under Rs 10 crore at the time. Over the years, the multiplex operator increased its holding to over 93.27%.
Under the latest transaction, PVR Inox will monetize its majority stake for Rs 226.8 crore. The deal values 4700BC at Rs 243 crore ($26.46 million), marking a more than 40x jump in valuation since PVR’s initial investment.
The acquisition will allow 4700BC to benefit from Marico’s “sharper FMCG focus, deeper distribution reach, and accelerated new product launches,” the company said in a statement.
Shares of Marico rose following the announcement and were up 0.3% at Rs 743.35 on the Bombay Stock Exchange. Meanwhile, PVR Inox’s shares slipped 0.4% to Rs 927.50.
PVR Inox said the transaction is expected to be accretive to its profit, free cash flow, and return ratios. Managing director Ajay Bijli described the deal as a move to monetize a non-core asset and the culmination of the company’s strategic role in building the brand.
Axis Capital acted as the exclusive financial advisor, while Shardul Amarchand Mangaldas & Co served as legal advisor to PVR INOX on the transaction. RMB Capital India acted as the sole financial advisor to Marico on the transaction.
