India Hospitality Corporation (IHC), which is led by Barista's first CEO Ravi Deol and Sandeep Vyas, is holding discussions with a clutch of investors including US-based private equity major Towerbrook Capital Partners LLP to divest stake in UK's second-largest sandwich supplier Adelie, as per a news report by Telegraph.
The news report, without naming its source, said Deol and Vyas are mulling to mobilise funds to buy out the remaining investors in IHC and also to augment the presence to new geographies. The other investors in IHC include Goldman Sachs, JP Morgan, Fidelity and New York-based fund Hayground that together hold under half of the group.
Adelie, which supplies quiches, salads, sandwiches and assorted ready-to-eat food to retail chains such as Starbucks coffee and Sainsbury's supermarkets, decided to induct a new investor in August this year. Rothschild is managing the sale process of the firm, and the second-round bids are understood to have been lodged by the private equity firms, the paper said.
Separate email queries sent by VCCircle to IHC and Towerbrook seeking details did not elicit any response by the time of filing this article.
IHC acquired Adelie, a ready-to-eat food products supplier in the UK, from private equity firm Duke Street Capital for $350 million in 2012.
While the move catapulted IHC into the big league of food products business, it also marked a shift in the company’s strategy as the bulk of its business moved outside India.
IHC, which went private and delisted from London's AIM market around the same time it bought Adelie, had started as a blank cheque firm and listed on the London Stock Exchange’s junior market AIM in 2006, raising $103 million in the process. It built its business around airlines catering, hospitality and QSR chains, starting with the acquisition of Mars Restaurants and its sister concern Skygourmet Catering for approximately $110 million. This brought the hotel brand Gordon House besides restaurants under Not Just Jazz By The Bay, Tendulkar’s, All Stir Fry and Just Around The Corner.
It, however, faced the heat of economic slowdown in Indian aviation and hospitality industry. The company exited the airline catering business by selling 74 per cent to Gateway Group for around $39 million in cash in October 2010 and the remaining 26 per cent later.
Previously it had also tried unsuccessfully to acquire Wagamama, a UK-based firm operating a chain of pan-Asian cuisine restaurants in Europe and the US. Wagamama was eventually acquired by Duke Street Capital.
(Edited by Joby Puthuparampil Johnson)