Tata Consumer Products on Tuesday said it will acquire Bengaluru-based Kottaram Agro Foods for Rs 155.8 crore to expand its product portfolio.
Kottaram Agro Foods (KAF) is primarily engaged in the business of healthy breakfast cereals and millet-based snacks under the trademark Soulfull.
The company will acquire 100 per cent of the issued and paid-up equity share capital of KAF and the move is consistent with TCPL's strategic intent to expand its product portfolio, and participate in multiple consumption occasions, the Tata group firm said in a statement.
"The said acquisition is in line with the company's strategic intent of entering into new adjacent categories in the food space," TCPL said.
This marks its entry into multiple new consumption occasions with new adjacent product categories, it added.
"This acquisition will allow TCPL to expand its product portfolio into the fast-growing 'on the table' and on the go categories and to participate in newer consumption occasions. There are also significant synergies possible with the existing business of TCPL in areas spanning distribution, procurement, and logistics," the company said.
Over the cost of acquisition, TCPL said, it has "consideration of Rs 155.8 crore".
The transaction is expected to be completed in the fourth quarter of FY 2021, according to TCPL, formerly known as Tata Global Beverages.
"In addition, the promoters are entitled to a contingent consideration, which is payable upon the business achieving certain operational and financial milestones over a period of 5 years," it added.
"This acquisition is a good strategic fit for Tata Consumer Products. It opens to us significant new market opportunities in the fast-growing mini-meals segments and helps us partner a passionate and ambitious team of entrepreneurs who will remain and become a part of Tata Consumer Products team," TCPL MD & CEO Sunil D'Souza said.
Soulfull synergizes well with TCPL's existing product portfolio and distribution network as well as the supply chain, he noted.
"We believe Tata Consumer is well-positioned to unlock the full potential of the Soulfull brand and scale," D'Souza added.
Brand Soulfull was launched in 2013 and in FY 2019-20.