With an eye on expanding its fair-price shop business in the nation?s capital, the Kishore Biyani-led Future Group is set to buy out the Big Apple chain of food and grocery stores. Sources said the deal size is expected to be around R100-150 crore and the company is expected to make the announcement public in a day or two.
Sources said, Future Consumer Enterprises, a subsidiary under Future Ventures, will acquire 100% equity share capital in Express Retail Services, the promoter firm of Big Apple. Express Retail Services is currently a debt-free company. Sources say that the acquisition will help the Future Consumer Enterprises brand ?Fare Price? to improve the operational and administrative infrastructure in Delhi-NCR region. The Future Group currently has 190 Fare Price provisional stores and is constantly looking to expand base in the country, the source said.
Established in 2005, the Big Apple company is promoted by Express Retail Services, a joint enterprise of Lalwani Holdings and the Chaurasia Group.
The enhanced footprint of Future Group will make it more attractive for international investors who may be striking an alliance with Future Group. ?The deal will be done under Future Ventures, which is a part of the Future Group. After acquisition, the current number of stores under Fare Price will increase from 100 to 165 in the Delhi-NCR region,? a source close to the development told FE. The aim behind this acquisition is to increase the footfall. It should be double of what it is today,? the source said.
Big Apple reported a turnover in FY12 of around R150 crore. Big Apple has also forayed into the home delivery format via its new Day2Day brand and aims to generate topline revenue of R400 crore in next 24-36 months, sources said.
The Big Apple deal, sources said, may not put additional pressure on the balance sheet of Future Group, which is already struggling with high debt. This is because the company will not borrow fresh funds for this acquisition. According to retail experts, the acquisition of Big Apple will offer the buyer attractive locations.
