Norwegian company to buy MTR Foods for Rs. 350 crores

Norwegian food company Orkla Foods may turn out to be the acquirer of South-based MTR Foods. The deal size is said to be around Rs. 325-350 crores. Earlier, US spice company McCormick was widely tipped to take over MTR. However, the deal fell through at the last minute due to differences over structuring of the deal, particularly on certain intellectual property issues relating to the brand name.

Orkla is keen on acquiring MTR as it will provide a launch pad for Indian operations. The Norway-based company has presence in bakery, seafood, pizzas, pies, taste enhancers and snacks. In the past, Orkla has grown its international presence through acquisitions in Romania, Sweden, Denmark and Iceland. Orkla Foods is part of Orkla ASA, one of Norway’s largest listed companies with its core businesses being branded consumer foods, specialty materials and financial investments.

MTR’s brand pull is such that several large Indian corporates, including Tata Coffee, ITC, Godrej and several PE funds like Blackstone, Indivision and Actis had shown interest in the company. NM Rothschild was the investment banker for MTR, and had estimated a value of Rs. 300 crores on the company when it called for bids earlier this year. The Maiya family controls 59% stake in the company directly and indirectly, with JP Morgan holding 26% stake. Another fund, Aquarius, holds 14-15%. MTR’s portfolio comprises ready-to-eat, ready-to-cook food ingredients and spices.

Read The Economic Times article for more details.

Pantaloon Retail to divest stakes in subsidiary companies

Pantaloon Retail India Limited (PRIL) is planning to dilute stakes in its subsidiary companies for expansion-related purposes. The companies that are lined up are Future Media, Future Capital, Future Logistics and Central and dilution of stakes would either be way of IPOs, preferential allotment or strategic sale.

Future Media targets developing retail space and malls as an outdoor media option. PRIL is in talks with WPP for a strategic partnership in Future Media. Future Logistics deals in supply chain and distribution management. Future Capital is a PRIL subsidiary that focuses on asset management and consumer finance. It manages Horizon and Kshitij, two real estate investment funds and Indivision, a consumer-related private equity fund, and soon plans to get into insurance, consumer credit and other consumer-related financial products and services. Central is a chain of lifestyle retail stores.

Equity analyst Edelweiss Securities estimates that of PRIL’s total requirement of Rs. 4500 crores, equity dilution would get the company Rs. 1000 crores. Quoting the company’s internal projections, the research firm also says that in all Mr. Biyani’s company needs approximately Rs. 2300 crores from external sources of which Rs. 1300 crores will come in the form of debt. Pantaloon’s expansion plans are targeted at taking the group’s total retail space to about 30 mn square feet by the end of 2011 from the current 3.5 mn square feet. By the end of FY10, Mr. Biyani is looking at 80 Pantaloon stores in various parts of the country from the current number of 23. Similar expansion is in the pipeline for Big Bazaar and Food Bazaar, where the company aims to take the number of stores to 225 and 250 respectively, growing from the current 35 and 53 respectively

In October 2006, ICICI Ventures and Kotak SEAF India had picked 15% and 6% stakes respectively in another PRIL subsidiary, Home Solutions Retail, bringing an investment of about Rs. 120 crores.

Read the article in The Economic Times.

BE Billimoria & Co. receives funding from Indivision

Indivision, the private equity fund promoted by Future Capital, has acquired a 26% stake in Mumbai-based contract construction company BE Billimoria & Co. for an estimated Rs. 75 crores. This is the $425 mn-fund’s first investment in the real estate sector and Future Capital has announced plans to enter the hospitality sector. The management of BE Billimoria estimates turnover for this year to be around Rs. 200 crores and is looking at trebling this figure in the next five years through a pan-India presence. The company is also considering a possible IPO in a year.

Currently, the promoters, Kaiyoze Billimoria and Digant Kapadia, each hold 16.5% stake in the company, while the rest is held by Merrill Lynch Capital Markets (4%), Indivision (26%) and other equity investors.

BE Billimoria has worked on residential and commercial projects with different partners. Some of the major projects that that the company has completed are IDBI Towers, Imax Theatre, Hotel Leela, Hotel Hyatt Regency and Reserve Bank of India among others, in the commercial space and Cadbury House, Hinduja Plaza and Palm Beach are some of the company’s projects in the residential space. The company has partnered with HDFC, Sun Group, IDFC and other real estate funds for various projects. This is the first time they have received private equity funding. The real estate sector, valued at $12 bn, is growing at 35-40% per annum. The sector has seen some large equity deals in the last few months with nearly $350 mn in investments flowing into the sector.

Read the article from The Economic Times.

BE Billimoria & Co. receives funding from Indivision

Indivision, the private equity fund promoted by Future Capital, has acquired a 26% stake in Mumbai-based contract construction company BE Billimoria & Co. for an estimated Rs. 75 crores. This is the $425 mn-fund’s first investment in the real estate sector and Future Capital has announced plans to enter the hospitality sector. The management of BE Billimoria estimates turnover for this year to be around Rs. 200 crores and is looking at trebling this figure in the next five years through a pan-India presence. The company is also considering a possible IPO in a year.

Currently, the promoters, Kaiyoze Billimoria and Digant Kapadia, each hold 16.5% stake in the company, while the rest is held by Merrill Lynch Capital Markets (4%), Indivision (26%) and other equity investors.

BE Billimoria has worked on residential and commercial projects with different partners. Some of the major projects that that the company has completed are IDBI Towers, Imax Theatre, Hotel Leela, Hotel Hyatt Regency and Reserve Bank of India among others, in the commercial space and Cadbury House, Hinduja Plaza and Palm Beach are some of the company’s projects in the residential space. The company has partnered with HDFC, Sun Group, IDFC and other real estate funds for various projects. This is the first time they have received private equity funding. The real estate sector, valued at $12 bn, is growing at 35-40% per annum. The sector has seen some large equity deals in the last few months with nearly $350 mn in investments flowing into the sector.

Read the article from The Economic Times.