For generations, Complan, Glucon-D, and Nycil have been household names in India. Now, they’re truly desi.
The deal and all the financial formalities is expected to be completed in early 2019, subject to regulatory approvals of the competition commission of India and other customary closing conditions, Kraft Heinz company said in a press release.
The Kraft Heinz Company declared on Wednesday, 24 October 2018 that it has gone into an arrangement to offer Indian brands Complan, Glucon-D, Nycil, and Sampriti to Cadila Healthcare subsidiary Zydus Wellness at a valuation of Rs 4595 crore. This valuation includes net working capital of Rs. 40 crores, cash of Rs. 15 crores and assumes no debt.
The acquisition will also involving two huge manufacturing facilities of Heinz India in Aligarh and Sitarganj and emplyees devoted to operations, research, sales, marketing and support. Heinz India has a distribution network of over 800 distributors, more than 20,000 wholesalers across 29 states in India. For the four brands, Heinz India recorded revenues of about Rs. 1150 crores and EBIDTA of about Rs. 225 crores for the 12 months period ending June 30. Zydus Wellness will have consolidated revenues of about Rs. 1700 crores.
The transaction is expected to close in early 2019, subject to regulatory approvals of the competition commission of India and other customary closing conditions, Kraft Heinz Company said in a statement.
“The sale of this niche business fits into our overall global growth strategy and our focus on investing in and growing brands within our core categories,” said Bernardo Hees, Chief Executive Officer at Kraft Heinz.
“India keeps on being a key market for Kraft Heinz, and actually, we’re fortifying our duty to extend and develop our Heinz sauces and Kraft business in India,” he said.
At current FX rates, this business creates around £116.07m (Rs 11.50bn) in net deals and roughly £23.21m (Rs 2.25bn) in balanced income before earnings before interest, tax, depreciation and amortization (EBITDA).
The deal isn’t required to materially affect Kraft Heinz’s annual financial results.
Under the terms of the assention, Kraft Heinz will sell to Zydus Wellness Limited (subsidiary of Cadila Healthcare Limited), 100 percent of equity shares in Heinz India Private Limited, or, in other words Complan, Glucon-D, Nycil and Sampriti brands, and two assembling offices, with around 900 workers related with these brands and activities.
JP Morgan Securities LLC served as an exclusive financial advisor to Kraft Heinz for this transaction, while India-based Cyril Amarchand Mangaldas and global law firm Gibson, Dunn & Crutcher served as legal advisors for Kraft Heinz.
About Kraft Heinz
The Kraft Heinz Company (NASDAQ: KHC) is the fifth-largest food and beverage company in the world. A globally trusted producer of delicious foods, The Kraft Heinz Company provides high quality, great taste and nutrition for all eating occasions whether at home, in restaurants, or on the go. The Company’s iconic brands include Kraft, Heinz, ABC, Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables, Maxwell House, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Plasmon, Quero, Smart Ones and Velveeta. The Kraft Heinz Company is dedicated to the sustainable health of our people, our planet and our Company. For more information, visit http://kraftheinzcompany.com
About Zydus Wellness Ltd.
Zydus Wellness Ltd. (ZWL) is the listed entity of the Zydus group and is one of the leading companies in the fast growing Indian consumer health market. The company has grown over the years on the back of pioneering brands like Sugar Free, EverYuth and Nutralite and innovations offering new benefits to consumers. Sugar Free, the flagship brand of Zydus Wellness, launched in 1988, is a sugar substitute that leads the market with dominant market share. ‘Sugar Free’, the largest selling sweetener brand in the country with over 93% market share, has now become more of a lifestyle brand rather than just a sugar substitute for diabetics. The skincare range of products sold under the umbrella brand ‘EverYuth’ has been able to retain its leadership position despite increasing competition and an influx of international brands. ‘Nutralite’, India’s largest selling table spread has gained widespread consumer acceptance as a healthier substitute to butter. For more information visit http://zyduswellness.in/
Glucon D, first launched in 1933, is the leader in the energy drinks segment in India. Complan, a household brand in the health food drink category, was introduced in India in 1969 as a milk based health food drink. “Today, Complan is considered to be one of the strongest brands associated with nutrition and health benefits and has a high spontaneous recall of nearly 90% in India. Launched in 1951, Nycil is the number one prickly heat powder with a pan India presence.
Sampriti, premium ghee offers immense opportunities for growth in the large retail segment,” the statement said. Sharvil Patel, Chairman, Zydus Wellness Ltd., said this development offers immense opportunity to broaden the company’s portfolio and invest in brands and products that the company believes are most relevant to health conscious consumers. Zydus Wellness has brands like Sugar Free, EverYuth and Nutralite.