Capital markets company Authum Investment and Infrastructure Ltd and Mahi Madhusudan Kela will acquire a significant minority stake in packaged snacks company Prataap Snacks, providing an exit to existing investor Peak XV Partners.
As per terms of the share purchase agreement, Authum and Kela will acquire 1.02 crore and 11 lakh shares of Prataap Snacks respectively, for an aggregate consideration of Rs 846 crore, at Rs 746 apiece. This is at a discount of nearly 29% to Prataap Snacks’ Thursday closing of Rs 1,045 per share.
Considering the transaction is for a stake more than 25% in a listed company, it will also trigger an open offer where Kela and Authum have proposed to acquire up to 63 lakh shares (26% stake) for Rs 544 crore at Rs 864 per share.
The transaction will provide a full exit to venture capital investor Peak XV – who will sell its entire 46.8% stake in the Yellow Diamond snacks maker.
Post the transaction, Prataap Snacks will continue to be a listed company. While Authum will become promoter, Mahi Madhusudan Kela will be part of pomoter group, as per the exchange filing.
The company commands a market capitalisation of Rs 2,497 crore ($298 million). As of the June quarter, the company had a revenue of Rs 421 crore and a net profit of Rs 9 crore.
Prataap Snacks offers multiple variants of products across categories like potato chips, namkeen and pellets. It has a separate range of sweet snacks with a presence across India. Its products are sold under the more commonly known Yellow Diamond, Avadh and Rich Feast brands.
JM Financial has been appointed manager to the open offer, it informed the exchanges.
According to reports, ITC, Bikaji Foods, and Haldiram’s were all believed to be in the race for Prataap Snacks.
