Tata Consumers Seal Deal for Capital Foods and Organic India Acquisition

Tata Consumer Products Ltd (TCPL) signed definitive agreements to acquire 100% equity shares of Capital Foods, owner of the brands Ching’s Secret and Smith & Jones, and Organic India, a company that sells organic herbal teas and health foods. While the acquisition of Capital Foods will be in a phased manner, TCPL will acquire 100% of Organic India in an all-cash deal.
TCPL will pay an enterprise value on a no cash-no debt basis of ₹5,100 crore for 100% stake in Capital Foods. While 75% of the equity shareholding will be acquired upfront, the remaining 25% will be acquired within the next three years, TCPL said in a filing to the exchanges on Friday evening.
For a 100% stake in Organic India, TCPL will pay ₹1,900 crore, along with an additional earnout for the shareholders linked to FY26 audited financials of the company. The estimated turnover of Organic India for FY24 is ₹360 – 370 crore, up from ₹324.4 crore in FY23.
The signing of the share purchase agreement with Capital Foods has ended months of speculation over the latter’s ownership that saw rivals such as Nestle and ITC bid aggressively. The acquisition is consistent with Tata Consumer’s strategic intent to expand its product portfolio and its target addressable market.
“Overall, Capital Foods has number one or number two positions in five large categories. This acquisition will enable Tata Consumer Products to expand its product portfolio and further strengthen its pantry platform. There are significant synergy benefits with the existing businesses of Tata Consumer Products in areas spanning distribution, logistics, exports and overheads,” TCPL said in its filing.
While talking about Organic India, Sunil D’Souza, MD & CEO, Tata Consumer Products said, “This transaction aligns well with Tata Consumer’s overall strategic objectives and presents exciting market opportunities in the rapidly growing health & wellness segment. In addition, Organic India has built very strong relationships with farmers to create a robust organic supply chain with a trusted brand and a loyal consumer base. Organic India’s differentiated products and robust supply chain together with Tata Consumer’s distribution strength across channels in India and specific geographies globally make us confident of accelerating momentum in the business while improving our margin profile.”

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