Khalil Ahmed, co-founder of Shantha Biotech who sold bulk of his stake to Sanofi-Aventis in a multi-million dollar deal few years ago, is now building a food business. Ahmed-promoted private firm Food Krafters & Services LLP (FKS) has acquired the brand name of established restaurant chain Hyderabad House, for an undisclosed amount, it said on Thursday.
Set up in 1998 by Mir Babar Ali with a single restaurant, Hyderabad House has grown to a chain of almost 40 stores across the country. It is known for serving Hyderabadi cuisine and is a fast-casual restaurant chain. The firm also has outlets in Australia, Nepal, Saudi Arabia and UAE.
Under the deal Ali family is only selling the brand name and would rechristen the existing outlets while continuing to run them.
Sources said it was a structured deal with no cash transaction and involves an earn-out model for the existing promoter.
FKS will hire a fresh team including chefs and build a new business from scratch in a semi quick service restaurant (QSR) model, it said.
It is also planning to strengthen Hyderabad House’s catering business by offering on-site services for weddings, corporate events, conferences and other private banquets.
“The deal would serve Food Krafters establish a firm foothold in the food retail industry. Hyderabad House fits well in our scheme of things and we intend to grow and expand using this brand name,” said Khalil Ahmed, managing director of Food Krafters.
The firm plans to invest Rs 35 crore ($5.5 million) in next two years to set up 50 outlets through a combination of company owned and franchisee route.
Khalil returned to India after working for over a decade in Oman in 1994 to start Shantha Biotech along with Varaprasad Reddy. They sold majority stake in a big deal and later diluted their holding further. He is also believed to have an interest in the energy sector.
Several QSR chains which are peers of Hyderabad House have raised funding in the past. This includes Ammi’s Biryani, which was backed by SAIF Partners.
In the space, QSR chain Hello Curry acquired Paratha Post early this weak.