Adding spice to its portfolio, herbal-natural consumer goods major Dabur India has acquired a majority stake in Badshah Masala. The Ghaziabad-based company has picked up a 51 per cent stake in the spices maker against Rs 587.52 crore at an enterprise value of Rs 1,152 crore, it announced today.
Mumbai-based Badshah Masala Pvt. Ltd. is estimated to achieve a revenue of Rs 250 crore in the current financial year - putting its valuation at 4.5 times of its revenue and 19.6 per cent of its earnings before, interest, tax, depreciation and amortisation (EBITDA). In FY2021-22, the company had raked in Rs 189.1 crore in revenue.
With this deal, Dabur also forays into the country’s branded spices and seasoning market valued at Rs 25,000 crore. According to the company, the move is in line with Dabur’s strategic intent to expand its foods business to Rs 500 Crore in 3 years and expand into new adjacent categories.
While the company will now be testing the waters with its new portfolio and scale it up to national levels, Dabur will pick up the rest 49 per cent stake in Badshah after 5 years. According to experts, while Badshah is a known brand in the spices market, its business continues to remain heavily dependent on the western region. With Dabur taking up the brand, it will now expand rapidly into other regions.
“The branded spices market in India is growing at 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,” Mohit Malhotra, Chief Executive Officer, Dabur India said in statement.
According to Hemant Jhaveri, Managing Director at Badshah Masala, Dabur will help drive the future growth potential of the brand on a stronger trajectory. “This transaction will enable us to accelerate our growth by adding our products to Dabur's broad portfolio to meet the needs of consumers across geographies,” he said.
Mohit Burman, Chairman, Dabur India said, the company intends to leverage its international market presence to grow the spices business globally.
Founded in 1958, by Jawaharlal Jhaveri and Indiraben Jhaveri Badshah Masala was run by the Javeri family as a partnership firm until January, 2021, when it was converted into a private limited company. Blended spices help it rake in 82 per cent of its revenue. It has two manufacturing facilities located in Umargam, Gujarat.