Tata Consumer Products Ltd has agreed to acquire a packaged foods startup that is backed by impact investment firm Aavishkaar Venture Management Services Ltd.
Tata Consumer said in a stock exchange filing that it will buy 100% of the issued and paid-up equity share capital of Kottaram Agro Foods Pvt. Ltd for Rs 155.8 crore ($21.3 million).
Kottaram Agro Foods makes breakfast cereals under the brand Soulfull. The company had clocked a turnover of Rs 39.38 crore for FY20 as compared with Rs 21.58 crore for FY19 and Rs 11.08 crore for FY18.
This means the firm is being sold at almost four times its revenue.
The acquisition is in line with Tata Consumer's strategic intent of entering new adjacent categories in the food space.
The acquisition, which is subject to conditions, is expected to be completed by the end of March.
Kottaram Agro Foods, which was launched in 2013 by Prashant Parameswaran, Rasika Prashant, K K Narayanan and Amith Sebastian, manufactures and sells branded packaged food products such as breakfast cereals and instant mix.
Aavishkaar had first invested Rs 35 crore ($5.37 million) in Kottaram Agro Foods in 2018. It had infused another $2.81 million the following year, according to VCCEdge.
Prior to the funding from Aavishkaar, the Bengaluru-based company had raised funding from Bennett Coleman & Co Ltd (BCCL), which runs Times Group.
Tata Consumer claims to be the second-largest player in branded tea in the world with over 330 million servings everyday across the globe.
In May last year, it acquired PepsiCo’s stake in NourishCo Beverages Ltd, an equal joint venture between the two companies.
Later in December, Tata Consumer divested its Australian coffee business to Buccheri Group Pty Ltd, which markets offerings under the brand name of Antico Coffee.
The company also has a joint venture with Starbucks called Tata Starbucks Ltd to own and operate Starbucks cafés in India.
