Dabur completes acquisition of 51% stake in Badhshah

Dabur India said on Monday that the company has completed the acquisition of 51% stake in Badshah Masala, the owners of the brand Badshah Masala—engaged in the business of manufacturing, marketing and export of ground spices, blended spices and seasonings.

“Pursuant to share purchase agreement (SPA) and shareholders agreement (SHA) executed by Dabur India with the existing promoters and shareholders of Badshah, Dabur has acquired 51% equity shareholding of Badshah from its shareholders upon fulfilment of terms and conditions as per SPA and SHA and the said transaction has been completed on 2nd January 2023,” it said in a stock exchange filing. Consequently, Badshah Masala has become a subsidiary of Dabur India effective Monday.

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On October 26, Dabur had announced Badshah’s acquisition for Rs 587.52 crore less proportionate debt as on the closing date, with the Badshah enterprise being valued at Rs 1,152 crore. This translates to a revenue multiple of around 4.5x and Ebitda (earnings before interest, tax, depreciation and amortisation) multiple of around 19.6x of financial 2022-23 estimated financials.

The company had said the acquisition is in line with its strategic intent to expand its foods business to `500 crore in three years and expand into new adjacent categories. As part of the agreement, Dabur will acquire the balance 49% in the spice major’s shareholding after five years.

The transaction is expected to be cash EPS neutral in the first year and accretive thereafter. The acquisition also marks Dabur’s entry into the over Rs 25,000 crore branded spices and seasoning market in India.

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Mohit Malhotra, CEO, Dabur India branded spices market in India is growing at a healthy double digits, led by increasing consumption, upgradation from unbranded to branded and growing preference for regional flavours across states.

“The market is dominated by regional players and holds significant potential for growth in the future. Badshah portfolio will gain from Dabur’s extensive distribution reach. We look forward to unlocking further synergies and market opportunities to capture the full potential of Badshah Masala,” he said.