In a significant development in the Indian snack food industry, Authum Investment and Infrastructure Ltd., along with renowned investor Mahi Madhusudan Kela, have signed a share purchase agreement to acquire a controlling stake in Prataap Snacks Ltd.
Acquisition Details
Authum Investment and Mahi Madhusudan Kela will acquire a 46.85% stake in Prataap Snacks from its private equity promoters, including Peak XV Partners Growth Investment Holdings I, Peak XV Partners Growth Investment II, and Sequoia Capital GFIV Mauritius Investments. This acquisition is valued at ₹846.60 crore, as reported by Moneycontrol and CNBC TV18.
The share purchase pact was signed at a price of ₹746 per share, which is a discount of 30% to the closing price on the day before the announcement. This transaction will trigger an open offer at a price of ₹864 per share.
Strategic Alignment
This acquisition aligns with Authum Investment's long-term strategy of diversifying its portfolio and investing in sectors that demonstrate both stability and growth potential. In a statement, Authum Investment emphasized its intention to nurture and expand the Prataap Snacks business, aiming to maximize value creation for all stakeholders and ensure a sustainable, profitable future for the company.
Market Impact
The news of the acquisition has already had a positive impact on Prataap Snacks' share price. On the day of the announcement, the shares of Prataap Snacks climbed steadily to end 20% higher at the close of trading.
Completion and Future Plans
The transaction is expected to be completed within six months. Following the acquisition, Prataap Snacks will become an associate company of Authum Investment (AIIL), marking a significant change in its ownership structure. The sellers, including the private equity firms, will cease to be part of the promoter entity in the company.
Conclusion
The acquisition of Prataap Snacks by Authum Investment and Mahi Madhusudan Kela is a notable move in the Indian snacks industry, reflecting the growing interest in consumer goods and the potential for growth in this sector. As Prataap Snacks transitions under new ownership, it will be interesting to see how the company leverages this change to expand its market presence and enhance its product offerings.
