Fine dining restaurant chain Speciality Restaurants, which is backed by multi-stage PE investor SAIF Partners, is acquiring majority stake in Mumbai-based bakery chain Love Sugar Dough, as per a stock market disclosure.
VCCircle had first reported in June 2013 that the company is in talks with firms to acquire a bakery chain.
It is picking 51 per cent stake for Rs 75 lakh.
Love Sugar Dough is a Mumbai-based company set up in 2011 by Nauzad Munshi and Tarannum Merchant. It has eight bakery stores spread across Mumbai, Pune and Surat and wish to scale up and expand the stores in other cities.
“We were looking at entering quick service restaurants as well as bakery chains. Though Love Sugar Dough is a small chain; it is an initiative in that direction. We wanted to invest in a company that had the potential of scaling up; as this is a new startup we felt it had potential and so the investment,” Rajesh Mohta, executive director finance, Speciality Restaurants Ltd, told VCCircle.
Nauzad Munshi, joint managing director, Love Sugar Dough, said, “We needed expertise and guidance. We wish to scale up in the coming years and hope they (Speciality Restaurant) can help us do so like the way they did with Mainland China.”
Speciality Restaurants has brands like Mainland China, Oh! Calcutta, Machaan, Sigree Global Grill, Flame & Grill, Haka, KIBBEH, Kix, Shack and a confectionary brand, Sweet Bengal.
“Historically we have been growing at the rate of 12-15 restaurants a year which is the plan at this point. From a long-term point of view, we would be looking at expanding our flagship brand Mainland China coupled with our Indian brand Sigree Global Grill,” said Mohta.
Speciality Restaurants earlier this year formed a joint venture company in Doha, Qatar in partnership with Al-Mohannadi Group to expand its flagship brand serving oriental cuisine Mainland China overseas.
SAIF Partners, which had backed the company before it went public, has been adding to its holding over the recent past and as of March 31, 2014 held 16.62 per cent stake in the firm. The restaurant chain also counts Wipro chief Azim Premji as a private investor.
Speciality Restaurants reported standalone net sales of Rs 245.85 crore, up 14 per cent over FY13 but net profit declined from Rs 23.41 crore in the year ended March 31, 2013 to Rs 18.9 crore last year.
(Edited by Joby Puthuparampil Johnson)