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Last Updated : Oct 24, 2018 01:09 PM IST | Source: Moneycontrol.com

Zydus jumps 8% on Kraft Heinz Indian arm acquisition

Heinz India's business comprises the brands Complan, Glucon D, Nycil and Sampriti Ghee, two large manufacturing facilities in Aligarh and Sitarganj

 
 
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Zydus Wellness shares rallied 8 percent intraday on October 24 after the company said it will jointly buy Heinz India Private Limited with Cadila Healthcare for nearly Rs 4,600 crore.

"The acquisition has an attractive fit in terms of well-entrenched brands in the fast growing categories of food, nutrition and skin care as well as complementary distribution capabilities. The acquired brands have a strong market presence and a legacy of over 50 years," the company said in its filing.

The consumer healthcare, which sells SugraFree, Everyouth, Everyouth Men'z and D'lite, said it has entered into a definitive agreement to acquire the subsidiary of Kraft Heinz, Heinz India Private Limited (Heinz India"), jointly with Cadila Healthcare at a valuation of Rs 4,595 crore.

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After this acquisition, Zydus Wellness, wherein Cadila Healthcare owns 72 percent stake, will have consolidated revenues of about Rs 1,700 crore.

The transaction is expected to close in Q4 FY19 and is proposed to be financed by a mix ofequity and debt, the company said, the transaction is expected to be EPS accretive.

Heinz India's business comprises the brands Complan, Glucon D, Nycil and Sampriti Ghee, two large manufacturing facilities in Aligarh and Sitarganj and teams devoted to operations, research, sales, marketing and support.

"This acquisition will be an ideal addition to Zydus Wellness, supporting our aspirations to grow in the consumer wellness space by providing multiple choices to consumers," Sharvil Patel, Chairman, Zydus Wellness said.

Heinz India also has a strong distribution network of over 800 distributors, more than 20,000 wholesalers covering 29 states.

For the four brands, Heinz India recorded revenues of about Rs 1,150 crore and EBIDTA of about Rs 225 crore for the 12-month period ending June 2018.

The company said this would be the second acquisition after the acquisition of Nutralite in 2006.

At 12:28 hours IST, the stock was quoting at Rs 1,288, up Rs 30.05, or 2.39 percent on the BSE.

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First Published on Oct 24, 2018 12:51 pm
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