ITC Ltd said on Thursday it has signed a stock purchase agreement to acquire 100% of the equity of Sresta Natural Bioducts Pvt. Ltd (SNBPL), the company produces and sells organic packaged foods under the “24 Spell Organic” brand in the domestic and international markets.
ITC has paid the most considerations ₹$472.5 million for free, debt-free, but adjusted according to the customary provisions in the stock purchase agreement, including ₹Rs 40 crore should be paid in advance when closed ₹$7.25 billion should be paid for the next 24 months after the closure.
Raj Seelam (founder) will assist in the transition and stay with the business for two years. The transaction is expected to close in the 26th fiscal year in the first quarter.
SNBPL’s portfolio includes over 100 organic products covering brands’ grocery staples, spices and condiments, cooking oils, beverages and more.
Read more: Demand for weight loss pills is growing. Can health companies keep up?
The government has been actively promoting the organic food industry through various programs and programs, aiming to improve farmers’ livelihoods, enhance exports, enhance packaging/marketing of products and ensure food security while promoting sustainable agriculture. India also has a full position to become a global hub for organic procurement and has existing advantages in regions such as rice and organic tea, the ITC said in a document on Thursday.
The Indian organic market (domestic and export) is estimated to be ₹10,000 million.
Strengthen organic portfolio
The acquisition strengthens ITC’s commitment to establish a future winning brand portfolio to meet the evolving needs of Indian consumers and drives value creation opportunities by leveraging ITC’s institutional strengths to drive synergy in areas such as product development and innovation, procurement, manufacturing, supply, supply chain and distribution.
The investment is consistent with Chairman Sanjiv Puri’s “ITC Next” strategy.
Hemant Malik, wholetime director, ITC, stated, “We are excited to have 24 Mantra Organic as part of ITC’s Foods Business’s portfolio of nutrition-led healthy foods products. 24 Mantra Organic has built a robust backend and sourcing network, which is core to its trusted organic products portfolio. Aligning with national priorities, we are confident that 24 Mantra Organic will fortify ITC’s presence and market standing in the high-growth organic products sector in India and overseas markets”.
Last month, Hotel Tobacco Group announced the acquisition of Century Pulp and Paper (CPP) from Aditya Birla Real Estate Ltd for a one-time consideration ₹34.98 million.
In February, ITC announced plans to acquire frozen food and ready-made food brand Prasuma.
ITC sells kitchen staple foods, snacks and personal care products, etc.
ITC said it had signed a confirmed agreement to obtain a 73.5% balance of Sparsh Baby Care Pvt, respectively. Limited (“Mother Sparsh”) is an associate company operating in advanced Ayurvedic and natural baby care spaces. The company said that the underpaint and underserved in the baby care sector in India provide ITC with opportunities to scale up and build future categories.
ITC first invested in the company in 2021.
