Nestle, Kraft Heinz, Tatas in race to buy out Capital Foods

Capital Foods is set to clock in Rs 800 crore in revenue for FY23

FMCG marques like Nestle, Kraft Heinz, Hindustan Unilever, Tatas, ITC, Orkla, and Nissin Foods are reportedly in fray for Capital Foods Pvt Ltd, the Economic Times reported on April 3, citing sources.

Capital Foods produces condiments, food products, and ingredients under the Ching's Secret and Smith & Jones brands. The estimated value of the buyout is reportedly $1-1.25 billion.

Capital Foods' three major shareholders - Invus Group, General Atlantic, and Ajay Gupta - had late last year decided to sell the company.

As per the ET report, the competition for the acquisition has become more intense in recent weeks.

Orkla owns MTR and Eastern Condiments' packaged foods business, while Kraft Heinz Co is the fifth-largest food and beverage company globally.

The ET sources did not reveal if the transaction would be entirely in cash or part stock. Some bidders have proposed buying up to 75 percent of the firm and making it public, the report noted.

Capital Foods was established in 1995 by Ajay Gupta, offering a variety of 'desi' Chinese and Italian food, including Ching's Secret instant Chinese noodles, soups, condiments, curry pastes, and frozen entrees, as well as the Smith & Jones range of ginger garlic paste, sauces, and baked beans.

Nestle India shares gained almost 3 percent on March 31 afternoon following a report that parent Nestle SA is among the final bidders for Capital Foods Pvt Ltd.

Capital Foods is set to clock in Rs 800 crore in revenue for FY23, as per analysts. Its topline growth has also been strong. From Rs 145 crore in FY13, when Kishore Biyani exited the company, revenue has compounded over 18 percent over the last ten years.