Capital International Private Equity Funds (CIPEF) is said to be leading the race to buy a stake in Gujarat-based potato chips and snacks maker Balaji Wafers Pvt Ltd, as per a report in Mint citing unnamed sources in the Indian company.
The report said the PE firm may pick around 15 per cent stake valuing the company at around Rs 4,000 crore. This would mean deal worth around Rs 600 crore or just about $100 million.
The company hopes to conclude the stake sale to CIPEF in a month’s time, the paper said.
Previous media reports had said PE firms such as Blackstone and Actis besides strategic acquirers such as PepsiCo and Kellogg’s also had looked at the deal where the firm was eyeing as much as $125 million.
Founded in 1976, Balaji Wafers had started holding discussion to divest stake to PE firms and strategic investors to raise funds last year. It is said to have clocked sales of around Rs 1,000 crore in the year ended March 31, 2013.
Currently, it is present in states like Gujarat, Madhya Pradesh, Rajasthan, Maharashtra and Goa and is said to have a market share of 60-65 per cent in the wafers and snacks category in western India. It is now planning to reach to the northern and southern markets by setting up local manufacturing units.
In the same space, in January this year, PE firm WestBridge Capital Partners picked around 25 per cent in DFM Foods from its promoters for over $10 million.
For Capital International this could be first new India transaction in almost three years after putting in money in the pre-IPO placement of L&T Financial Holdings. In the past it has also bet on firms like Multi Screen Media (formerly Sony Entertainment Television India), MindTree Consulting, Deccan Aviation and Manipal Global Education Services.
CIPEF had raised $3 billion for its sixth emerging markets private equity fund CIPEF VI two years ago, exceeding the $2.5 billion target. Its investment in L&T Financial Holdings was routed through this fund.
CIPEF is part of the Capital Group Companies, one of the world’s largest investment management firms with assets under management worth $1 trillion.
(Edited by Joby Puthuparampil Johnson)