Restaurant operator Sapphire Foods India Pvt Ltd, an Indian franchisee of Yum! Brands Inc., has raised growth capital from private equity firm Creador in a transaction that also involved some existing investors making a partial exit.
India- and Southeast Asia-focussed Creador and secondaries specialists NewQuest Capital and TR Capital have invested Rs 1,150 crore (about $155 million) in the company.
Sapphire Foods, which runs KFC, Pizza Hut and Taco Bell chains in the Indian subcontinent, didn’t disclose the break-up of the primary and second components.
However, a person in the know told The Capital Quest that the primary round is estimated to be around Rs 300-350 crore. The balance was secondary share sale, providing partial exit opportunities to CX Partners, Samara Capital, Goldman Sachs and Edelweiss PE, the person said, asking not to be named.
The funding round — which is said to be a pre-IPO round – values the company around Rs 4,000-4,200 crore, as per estimates by The Capital Quest.
“Sapphire Foods, by leveraging customer loyalty to the KFC, Pizza Hut and Taco Bell brands is well-positioned to capture further opportunities in the territories in which it operates and expand into other product lines or markets,” said Kabir Thakur, managing director and co-head of India at Creador.
Avendus Capital was the sole financial advisor to Sapphire Foods. Swiss multinational bank UBS’ investment banking vertical was the sole financial advisor and placement agent of the Samara Capital-led sellers’ consortium.
Sapphire Foods is led by group chief executive officer Sanjay Purohit along with a professional management team backed by PE firms. It operates about 450 outlets in India, Sri Lanka and Maldives.
The company is looking to go public later this year or early 2022 through an initial public offering.
The company plans to mobilise about Rs 1,500-2,000 crore through the planned IPO that may bump up its valuation to compete with rival Pizza Hut and KFC franchise operator Devyani International, whose shares will list on the exchanges later this week.
Devyani International, which is housed under Ravi Jaipuria-led RJ Group, sought Rs 10,822 crore in valuation through the IPO that was subscribed nearly 117 times the shares on offer.