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ITC completes acquisition of Sunrise in ₹2,150-Cr all-cash deal

ITC completes acquisition of spice-maker Sunrise in ₹2,150-cr all-cash deal

The company has completed 100 per cent acquisition of the equity share capital of Sunrise on July 27, 2020,” – ITC.

Diversified conglomerate ITC Ltd has completed the acquisition of spice-manufacturer Sunrise Foods Private Ltd at an “upfront” cash deal price of 2,150 crores. Shares of Sunrise Foods were acquired on a “cash-free, debt-free” basis. In a stock market notification, ITC said the acquisition was completed on July 27 with 100 per cent of the equity share capital being acquired.

“In addition, the sellers are entitled to contingent consideration of an amount not exceeding 150 crore, which is payable upon Sunrise achieving mutually agreed operational and financial milestones over a period of two years,” the company mentioned in a regulatory filing.

ITC enters into a Share Purchase Agreement to acquire 100% equity share capital of Sunrise Foods Private Limited

Sunrise is a clear market leader in eastern India in the fast-growing Spices category with a rich heritage and brand legacy of over 70 years. Over the years, the brand has built a loyal consumer franchise, anchored on a differentiated product portfolio tailored to regional tastes and preferences, both in the basic and blended spice segments.

As of July 27, 2020, Sunrise and its two subsidiaries, Sunrise Sheetgrah Private Ltd and Hobbits International Foods Pvt Ltd, have become wholly-owned subsidiaries of ITC.

ITC’s Aashirvaad range of spices is already a market leader in Telangana and Andhra Pradesh and the Company is one of India’s leading producers and exporters of high-quality food-safe spices.

The proposed acquisition will augment the Company’s product portfolio and is aligned to ITC’s aspiration to significantly scale up its Spices business and expand its footprint across the country, the company mentioned in a tweet on Wednesday.  The deep consumer connects and distribution strength of SFPL in the focus markets, together with synergies arising out of the sourcing and supply chain capabilities of the Company’s Agri-Business and its pan-India distribution network, will provide significant value creation opportunities for the Company.

ITC enters into a Share Purchase Agreement to acquire 100% equity share capital of Sunrise Foods Private Limited

The proposed transaction is also in line with ITC’s philosophy of enhancing the competitiveness of Agri value chains in India whilst making a meaningful contribution to enhancing farmer incomes.

Finalisation of the SPA(Sale purchase agreement) along with related processes was completed during lockdown conditions, reflecting the Company’s agility and resilience in dealing with the new normal.

Focus on FMCG

ITC has been focussing on the non-cigarette FMCG business over the past few years.

Currently, the FMCG-Others segment is the second-largest for the company in terms of revenue, ahead of hotels, agri-business and paper & packaging.

Under FMCG-Others, ITC has a presence in segments such as foods, personal care, stationery, matches and incense sticks. The Sunrise Foods buyout complements ITC’s food portfolio, which consists of brands such as Aashirwaad, Sunfest, Bingo!, YiPPe!, B Natural and Fabelle, say market sources.

About the author

Oishika

Oishika is a management student with a curious enthusiasm for MBTI and classic literature. She's a capable leader, although she doesn't choose to lead unless she has to. She is an obsessive reader and an impulsive writer which can get intense on occasion. She is currently creating content at TIW.

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