Motilal Oswal PE takes 20% in Mrs Bector’s
Summary
BANGALORE | CHANDIGARH: In a style reminiscent of iconic technology entrepreneurs who founded new businesses in suburban garages, Rajni Bector first set up a cakes and creams business in the garage of her Ludhiana home.In just over three decades, Mrs Bectors little hobby has grown into a multicrore diversified food products group that makes Cremica biscuits, ketchup and condiments and includes flagship company Mrs Bectors Food Specialties that is now firmly on the radar of private equity investors.Earlier this week, Motilal Oswal Private Equity Advisors picked up 20% share in the Ludhiana-based company by buying out the complete stake held by earlier investor, Mauritius based Jade Dragon, a unit of Goldman Sachs.The PE firm has put in between 60-70 crore in Mrs Bectors Food Specialties that is estimated to have an enterprise value of between 300 crore to 350 crore, according to a person familiar with the development.Goldman has exited in favour of Motilal Oswal. The Goldman Sachs stock has been sold to Motilal Oswal, said Akshay Bector, managing director, Mrs Bectors Food Specialities.Goldman Sachs, a global investment banking and securities firm, picked up 10% stake in the company for 50 crore four years ago, that valued the company at 500 crore in 2006. As the economy grows from $1-2 trillion in the next 4-5 years, branded food consumption will increase with the growing income levels, said Raamdeo Agrawal, chairman of Motilal Oswal Private Equity Advisors Motilal Oswal will now be part of the companys board of directors, taking the seat that previously belonged to Goldman Sachs. We are well funded for our current growth plans, with Motilal as an investor we will benefit from the wide reach it has in the Indian capital markets, adds Mr BectorMrs Bectors presently has 12 lines of products including breads, biscuits, sauces, gravies, ice creams, condiments that it supplies to key food brands including McDonalds, HUL, Big Bazaar, Spencer, Sodexho, Taj Group, ITC Group, Jet Airways, Indian Airlines and chains like Barista, Cafe Coffee Day, Pizza Hut, Dominos and Papa Johns. The IPO will help in renewed growth or diversification, says Mr Bector who clarified that while the company will continue to grow in the food processing segment, the Bector family may look at other avenues for diversification.The company will add more food products to its present range in the coming two years, expecting sales to touch 750-800 crore before it goes public, up from the target of 500 crore of turnover in the current financial year.