Dabur acquires majority stake in Badshah Masala for Rs 587.52 Crore

Marks entry into Rs 25,000 cr+ Spices & Seasoning category
Dabur acquires majority stake in Badshah Masala for Rs 587.52 Crore
Photo - Badshah Masala

Dabur India announced that it has signed definitive transaction agreements to acquire a 51% shareholding of Badshah Masala, which is engaged in the business of manufacturing, marketing, and export of ground spices, blended spices, and seasonings. This acquisition is in line with Dabur’s strategic intent to expand its Food business to Rs 500 Crore in three years and expand into new adjacent categories. This also marks Dabur’s entry into the over Rs 25,000 crore branded spices and seasoning market in India.

Dabur is acquiring a 51% stake in Badshah for Rs 587.52 crore, less proportionate debt as of the closing date, with the Badshah enterprise being valued at Rs 1,152 crore. This translates to a Revenue multiple of around 4.5x and an EBIDTA multiple of around 19.6x for the financial year 2022-23 Estimated financials.

Announcing the acquisition, Mohit Burman, chairman, Dabur India, said, “The Indian spices and seasoning category is a large and attractive market. Badshah Masala is one of the key players in this space. Our investment in Badshah Masala will help expand this business and continue to provide unmatched quality products. This acquisition will accelerate our growth strategy as we continue to build our Food business. We intend to leverage our international market presence to grow this business globally.”

“The transaction is expected to be Cash EPS neutral in the first year and accretive thereafter. The acquisition is expected to be completed within this fiscal. As per our agreement, we will acquire the balance 49% shareholding after five years,” said, P. D. Narang, group director, Dabur India.

Mohit Malhotra, chief executive officer, Dabur India, said, “Branded Spices market in India is growing at healthy double digits, led by increasing consumption, upgradation from unbranded to branded and growing preference for regional flavors across states. The market is dominated by regional players and holds significant potential for growth in the future. Dabur has an existing Foods portfolio and views ground and blended spices as a good addition to this portfolio. Badshah’s portfolio will gain from Dabur’s extensive distribution reach. We look forward to unlocking further synergies and market opportunities to capture the full potential of Badshah Masala.”

Hemant Jhaveri, managing director, Badshah Masala, said, “We are delighted to enter into a strategic partnership with Dabur. Dabur stands for Trust and Heritage and joining hands with Dabur will help drive the future growth potential of Badshah on a stronger trajectory. Our companies are a great fit. This transaction will enable us to accelerate our growth by adding our products to Dabur's broad portfolio to meet the needs of consumers across geographies.”

Ajay Shah, advisor - Badshah Masala, said, “This strategic investment of Dabur brings together two strong Indian brands. This deal is growth-oriented, mutually complementary, value accretive, and beneficial for both the companies.”

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