In a major deal, Zydus Wellness Wednesday announced acquiring Heinz India's consumer wellness business, that includes popular brands Complan and Glucon D, in a transaction worth Rs 4,595 crore.
Zydus Wellness jointly with Cadila Healthcare has signed definitive pacts to acquire Heinz India for Rs 4,595 crore that includes net working capital of Rs 40 crore, cash of Rs 15 crore and assumes no debt, the companies said in separate regulatory filings.
Heinz India is a subsidiary of the US-based Kraft Heinz. Cadila Healthcare holds majority stake in Zydus Wellness.
The transaction is expected to close by March quarter of this financial year, Zydus Wellness said in a statement.
The acquisition will include Heinz India's popular brands such as Complan, Glucon D, Nycil and Sampriti Ghee, it added.
"The transaction is proposed to be financed by a mix of equity and debt. Select leading private equity firms have committed to partnering the transaction by way of equity support. The transaction is expected to be EPS accretive," the statement said.
Heinz India's business includes large manufacturing facilities in Aligarh and Sitarganj and teams devoted to operations, research, sales, marketing and support, it added.
Heinz India has a strong distribution network of over 800 distributors, more than 20,000 wholesalers covering 29 states, the statement said.
Zydus Wellness Chairman Sharvil Patel said: "This development offers immense opportunity to broaden our portfolio and invest in brands and products that we believe are most relevant to health conscious consumers."
It leverages the group heritage, innovation track record, combined brand offerings and capabilities to meet and exceed its consumers' evolving health and wellness needs, he added.
"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," Patel said.
When asked whether Zydus would also bid for another health drink Horlicks, which is believed to be on the shelves from its promoter, Patel said:"No. We are not. For the time and strategic rationale, this brand (Complan) makes more sense for us."
Heinz India recorded revenues of about Rs 1,150 crore for the brands, and EBIDTA of about Rs 225 crore for the 12 months period ended June 30, 2018, it added.
Following this acquisition, Zydus Wellness will have consolidated revenues of about Rs 1,700 crore, the statement said.
The acquisition is beneficial in terms of well-entrenched brands in the fast growing categories of food, nutrition and skin care as well as complementary distribution capabilities. The brands to be acquired have a strong market presence and a legacy of over 50 years, it added.
With brands like Sugar Free, EverYuth and Nutralite, Zydus Wellness has a strong brand equity in the food, nutrition and skin care markets, the company said.
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