Media firm Bennett, Coleman & Company Ltd (BCCL), which typically invests in companies through ad-for-equity deals, has taken options to buy up to 12 per cent equity stake in Dalmia Continental Pvt. Ltd. (DCPL), promoters of Leonardo Olive Oil and Hudson Canola Oil brands. The deal value was not disclosed.
Earlier media reports had quoted the top management as saying the firm is in talks to dilute 22 per cent stake to private equity players to raise Rs 25 crore. The funds were to be used for marketing expenses to promote the Leonardo brand.
DCPL is the flagship company of VN Dalmia, son of late industrialist Ramkrishna Dalmia, founder of the Dalmia-Jain Group, who once controlled a conglomerate spanning various sectors which included BCCL. BCCL is now controlled by the Jain family, the grandsons of SP Jain, the son-in-law of Ramkrishna Dalmia. Italian corporate Nicola Pantaleo, S.P.A. holds 27 per cent equity in DCPL.
DCPL launched Leonardo Olive Oil in 2003 and according to the firm it has grown at 120 per cent compounded annual growth rate since then. In 2011-12, Leonardo Olive Oil had total sales of Rs 40 crore. The firm claimed Leonardo has around 30 per cent market share in the Indian olive oil market. It also sells Hudson Canola Oil, which is imported from Canada.
The company plans to spend a total of Rs 100 crore in marketing initiatives up to 2016-17.
BCCL usually invests through ad-for-equity deals where it picks stake in lieu of value of ads to be published/broadcasted through its various media platforms. BCCL runs publications including The Times of India and The Economic Times besides the Times Now news channel.
“Leonardo is an olive oil brand and the Times Group will be associated with a company and brand that have the potential to grow due to the consumer’s need for their products as well as the higher social purpose behind their efforts,” as per a BCCL statement.
(Edited by Prem Udayabhanu)