Advent International offers to take DFM Foods private; stock jumps

 Advent International offers to take DFM Foods private; stock jumps

US-based private equity firm Advent International has proposed to take DFM Foods Ltd private, less than three years after buying a controlling stake in the Mumbai-listed snacks maker.

Advent, which currently owns 73.7% of DFM, said it intends to buy the remaining shares to take full ownership of the company. This will provide it increased “operational flexibility” to support DFM’s business and make additional investments in the company, Advent said.

Shares of Delhi-based DFM Foods, which sells the Crax brand of salted snacks, jumped by their maximum daily limit of 20% to Rs 304.30 apiece on the BSE on Tuesday. The broader market was 0.7% higher in morning trade.

Advent hasn’t fixed the price at which it plans to buy the shares from public investors. Instead, it said the price will be determined through a reverse book building process. The PE firm will announce the floor price of the shares at a later date.

The PE firm had taken control of DFM Foods Ltd in September 2019. At the time, it bought almost 68% of DFM Foods from the company’s founders and Indian PE firm WestBridge Capital for Rs 851.67 crore ($118.8 million then). WestBridge had invested in DFM in 2014.

Advent had also made an open offer to buy up to an additional 26% from the company’s public shareholders at the time at Rs 249.50 per share. However, it eventually bought only an additional 4.62% stake for about Rs 58 crore.

Advent’s India exposure

Advent has been investing in India since 2007 and founded its Mumbai office in 2009. Over the past 15 years, it has invested over $2.9 billion across 13 companies in India.

The PE firm, which closed its tenth flagship fund with a corpus of $25 billion two months ago, has become one of the more active buyout groups in India over the past couple of years. It has sealed four control deals in India since January 2021 and struck another bolt-on transaction recently via portfolio company Manjushree Technopack.

Apart from DFM, Advent has made four consumer-sector investments in India. These are Eureka Forbes, Crompton Greaves Consumer Electricals, Dixcy Textiles and Enamor. Advent had struck a deal to acquire Eureka Forbes from Shapoorji Pallonji Group last September.

In January, Advent inked a control deal for API maker Avra Labs. Last year, it sealed a buyout deal for ZCL Chemicals and participated in a late-stage funding round of tech startup Zenoti.

In December, it acquired a majority stake in digital engineering services firm Encora Digital Inc from PE firm Warburg Pincus at a valuation of approximately $1.5 billion.

Sumit Upadhyaya

error: Content is protected !!
The Capital Quest