Adani Wilmar to buy GD Foods to expand its value-added products portfolio

The edible oil major also said the 'Tops' brand is among the top three players in the tomato ketchup and pickles category

Adani Wilmar (AWL), one of India's largest food FMCG (fast moving consumer goods) companies, on Tuesday announced the signing of a definitive agreement to acquire G D Foods Manufacturing (India) (GD Foods) to increase its portfolio of value-added food products.

 

The acquisition will be executed in multiple tranches. In the first tranche, it will acquire 80 per cent of the share capital at an agreed enterprise value of ₹603 crore and the remaining 20 per cent to be acquired over the next three years. For subsequent tranches, the price per share will be arrived at basis an enterprise value, which will be calculated by a pre-determined method in the manner set out under the share purchase agreement, it said in its stock exchange filing.

 

 

In 2023-24 (FY24), GD Foods achieved a revenue of ₹386 crore, growing at a three-year CAGR (compound annual growth rate) of 15 per cent, and recorded an Ebitda of ₹32 crore. Ebitda stands for earnings before interest, taxes, depreciation, and amortisation.

 

The acquisition is subject to meeting customary closing conditions, with the first tranche expected to close in 60 days. The transaction will be funded by internal accruals or initial public offer (IPO) proceeds.

 

“GD Foods-owned brand ‘Tops’ has built a strong reputation as a household brand in North India over the last 40 years, offering high-quality products in categories spanning tomato ketchup, snack sauce, specialty sauces & culinary sauces, jams, pickles, noodles, instant mixes, corn & choco flakes, and cooking essentials such as vinegar, baking powder, cake mix, and corn flour,” Adani Wilmar said in its press release.

 

The edible oil major also said, the “Tops” brand is amongst the top three players in the tomato ketchup and pickles category. It will further invest in the brand and significantly increase the distribution reach of all its products. This acquisition will lead to a significant addition of margin-accretive products in its portfolio.

 

GD Foods is headquartered in Delhi and its sales are mainly concentrated in seven states in North India, with a retail presence across more than 150,000 outlets. It also maintains in-house manufacturing facilities at three locations.

 

Angshu Mallick, managing director and chief executive officer (MD & CEO) of Adani Wilmar, said: “As the market evolves, there is a clear need for trusted national food FMCG brands to deliver high-quality, affordable products that fulfil the essential needs of Indian kitchens. Delivering on this requires best-in-class manufacturing operations and a broad distribution reach, both of which are key strengths of AWL.”

 

He added, “The acquisition of GD Foods aligns with our vision and will significantly enlarge AWL’s offerings to meet the evolving needs of Indian households. With eight new product categories added to our portfolio, we are laying a strong foundation to build a formidable presence in the value-added products market over time.”

 

For Adani Wilmar, KPMG India Corporate Finance was the financial advisor on the transaction, PricewaterhouseCoopers Services was the due diligence advisor, and Cyril Amarchand Mangaldas as legal counsel. For GD Foods, Equirus Capital acted as financial advisor and J Sagar Associates as legal advisor.

 

Nitin Seth, vice chairman of GD Foods, said: “We are delighted to see ‘Tops’ become a part of AWL. For the past 40 years, we have remained committed to understand and meet the needs of Indian households through innovative products. Now, with AWL’s strength behind us, ‘Tops’ products will reach a much larger number of homes. We are confident that AWL will continue to delight customers and unlock the true potential of the brand.”