Lavazza of Italy, the world’s sixth largest coffee roaster, has entered the Indian market by acquiring C Sivasankaran’s coffee chain Barista and vending brand Fresh & Honest.
The exact size of the deal could not be ascertained. It was known that Lavazza would invest $150 million (Rs 675 crore), inclusive of this deal, in India in the next two years. The deal will be completed in a month.
Alberto Lavazza, CEO of Lavazza Group said, “The agreement fits in well with our strategy to grow in markets with high development potential.”
V Srinivasan, CEO, Sterling Infotech Group which owns the coffee chain said, “The Sterling group has decided to focus and expand in the area of renewable energy and as a consequence we are divesting the F&B business.”
Sivasankaran, who has perhaps never lost money in a stake sale except when he sold his 10% in Bharti Telecom back to Sunil Mittal, would extract a handsome premium from this deal as well, they added.
Sivasankaran, popularly known as Siva, had bought 65% in Barista from Amit Judge-controlled Turner Morrison three years ago, and later purchased the remaining 35% stake from the Tata group. His Sterling Group was learnt to have paid nearly Rs 65 crore for the acquisition of 100 per cent in Barista.
Sivasankaran had put the coffee chain on the block in August last year and appointed Standard Chartered to look for a buyer. Lazard is Lavazza’s advisor. Lavazza earns two-thirds of its annual turnover from packet sales of roast-and-ground coffee powder and the balance from out-of-home cafe and vending business. The company sells packet coffee under the Lavazza brand name through 24,000 outlets in 80 countries. It imports 12 per cent of its total coffee beans from India.
Fresh & Honest Cafe has been a pioneer in the freshly brewed coffee vending business in India, a release said. |
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