Kohlberg Kravis Roberts & Co, or KKR, has joined the race to pick up a minority stake in Vijay Mallya's United Spirits (USL), which is the world’s third-largest liquor marketer. The private equity biggie is looking to pick up USL’s treasury stocks, which amount to a 14.8%stake in USL, reports Economic Times. Mallya has been in discussions with strategic players like Diageo and Bacardi for some time now, and is now also looking at financial investors.
The shares of USL reacted positively to this news, rising up by more than 6% reaching days high of Rs 751, against its yesterday's closing price of Rs 705. The 14.8% stake as per yesterday's closing price would be valued at Rs 1,045 crore (~$210 million), but Mallya would certainly seek a premium to current trading levels. The stocks 52 week high is Rs 1,873 per share.
A MNC player would be willing pay a premium factoring in the advantage of distributing its the distribution of its products in the Indian market, the world's largest beer market by volume.
The report adds that MNCs are willing to pay as much as Rs 1,400 per share. USL is also looking at issuing fresh shares, apart from selling treasury stocks.
Mallya is raising funds to pay off the Rs 6,900 crore debt on its books. UB Group's recent acquisitions have been funded by debt, including the $827 million acquisition of Whyte & Mackay. The deal will help UB deleverage its balance sheet, which is its first priority.
KKR set up its India office earlier this year, hiring former Citigroup India honcho Sanjay Nayar. A significant minority in one of the worlds largest spirits maker with a 55% share in the fast growing Indian market may just be the grand start its looking for.
It has done couple of deals before setting up office in the country - the leveraged buyout of Aricent, and $250 million for a stake in Bharti Infratel, the telecom tower arm of Bharti Airtel.
PE Investments In The Space
Alcoholic beverages market are considered somewhat recession proof, with sales being affected only mildly. Private equity funds, who are now focusing on India's domestic consumption story, seem to be actively looking at deals in this space now. Private equity firm Wilbur Ross & Co is looking to acquire Cobra Beer brand or take a controlling interest in the beermaker’s Indian unit, as per reports. Standard Chartered Private Equity is also believed to be in the race.
There have been some investments in this space before in India. Lighthouse Funds has picked up a stake in Imperial Spirits and Sula Wineyards has raised funds from a bunch of PE investors including Indivision India Partners, the PE fund of Kishore Biyani's Future Capital Holdings.
Showing posts with label Beverages. Show all posts
Showing posts with label Beverages. Show all posts
Tuesday, April 21, 2009
Thursday, April 9, 2009
Wilbur Ross leads race to buy Cobra Beer
Wilbur Ross, the master of distress buyouts, has emerged as a strong contender to acquire the troubled Cobra Beer that has been put on the block by its founder Karan Billimoria, according to two people close to the development.
The billionaire investor, who has recently been active in India, is looking to either buy the Cobra Beer brand or take a controlling interest in the beermaker’s Indian unit. This comes even as North American brewer Molson Coors is showing up for Cobra Beer’s European operations, mainly centered around the UK market.
Wilbur Ross & Co is believed to be exploring a partnership with alcoholic beverage industry veteran Ravi Jain for acquiring the Cobra Beer stake. Mr Jain could not be reached for comment at the time of going to press. ET had reported in its edition dated January 20 that Mr Jain, who is emerging from a three-year no-compete arrangement with the UB chairman Vijay Mallya, may be interested in Cobra Beer.
Standard Chartered private equity is also holding talks, but it is not clear whether it is bidding for the entire business or only the India part of Cobra Beer.
The privately held Cobra Beer could be valued at $150-200 million. But the figures will depend on how the deal is structured - whether the company will be sold as one going concern or split on the basis of geography.
The Billimoria family mandated NM Rothschild earlier this year to sell or find a partner for the two decade-old Cobra Beer. “The process of finding a strategic partner or selling the business is ongoing and we will make announcements in due course. We do not comment on speculation,” said Cobra Beer CEO, Adrian McKeon, when contacted.
Cobra’s overall volume sale is estimated at 6 million cases, with the Indian market accounting for little over 1.5 million cases (of 7.8 litre each). Its annualized revenue is closer to $100 million, as per estimates.
Last year, Cobra Beer and Diageo failed to agree on a deal whereby the latter would have acquired a 30% stake in the brewer. The Billimoria family is keen on roping a cash-rich investor in the company, which is struggling under mounting debt. The company CEO Adrian McKeon said the latest half-year figures showed that Cobra Beer was shrugging off poor market sentiments in the UK to post a rather healthy 21% rise in volumes.
In India, sources added, Cobra also needs funds to close the transaction to acquire a 76% stake in the Patna-based Iceberg Breweries before April-end. Cobra Beer hit the UK curry restaurant chains as an imported beer in the early 90s. The brand built a significant business riding on the growing popularity of curry restaurants in that country. It later shifted production to Europe and expanded into the mainstream retail market.
Source: http://economictimes.indiatimes.com/articleshow/4377419.cms
The billionaire investor, who has recently been active in India, is looking to either buy the Cobra Beer brand or take a controlling interest in the beermaker’s Indian unit. This comes even as North American brewer Molson Coors is showing up for Cobra Beer’s European operations, mainly centered around the UK market.
Wilbur Ross & Co is believed to be exploring a partnership with alcoholic beverage industry veteran Ravi Jain for acquiring the Cobra Beer stake. Mr Jain could not be reached for comment at the time of going to press. ET had reported in its edition dated January 20 that Mr Jain, who is emerging from a three-year no-compete arrangement with the UB chairman Vijay Mallya, may be interested in Cobra Beer.
Standard Chartered private equity is also holding talks, but it is not clear whether it is bidding for the entire business or only the India part of Cobra Beer.
The privately held Cobra Beer could be valued at $150-200 million. But the figures will depend on how the deal is structured - whether the company will be sold as one going concern or split on the basis of geography.
The Billimoria family mandated NM Rothschild earlier this year to sell or find a partner for the two decade-old Cobra Beer. “The process of finding a strategic partner or selling the business is ongoing and we will make announcements in due course. We do not comment on speculation,” said Cobra Beer CEO, Adrian McKeon, when contacted.
Cobra’s overall volume sale is estimated at 6 million cases, with the Indian market accounting for little over 1.5 million cases (of 7.8 litre each). Its annualized revenue is closer to $100 million, as per estimates.
Last year, Cobra Beer and Diageo failed to agree on a deal whereby the latter would have acquired a 30% stake in the brewer. The Billimoria family is keen on roping a cash-rich investor in the company, which is struggling under mounting debt. The company CEO Adrian McKeon said the latest half-year figures showed that Cobra Beer was shrugging off poor market sentiments in the UK to post a rather healthy 21% rise in volumes.
In India, sources added, Cobra also needs funds to close the transaction to acquire a 76% stake in the Patna-based Iceberg Breweries before April-end. Cobra Beer hit the UK curry restaurant chains as an imported beer in the early 90s. The brand built a significant business riding on the growing popularity of curry restaurants in that country. It later shifted production to Europe and expanded into the mainstream retail market.
Source: http://economictimes.indiatimes.com/articleshow/4377419.cms
Wednesday, March 11, 2009
Mallya Likely To Divest 15% Stake In United Spirits
UB Group Chairman Vijay Mallya said in a statement that four global spirits makers including Diageo, the world's largest, evinced interest in acquiring a stake in United Spirits Ltd. or USL, the country's largest liquor manufacturer. UB Group holds around 38% in USL, reports media. Mallya declined to reveal the names of the other three interested parties, as it would be inappropriate to disclose further details at this stage. According to company officials, the group is planning to sell up to 14.9% of a total of 17% of treasury stocks in USL to strategic partners.
Treasury stocks are those shares, which are traded by the company in open market, and these shares are not eligible for bonus and do not have voting rights.Sources said in a statement that Mallya is interested in selling the stake in USL to raise funds to retire debt.United Spirits has over 150 products in its portfolio, including the brands Black Dog, Signature, Royal Challenge and Romanov.
Treasury stocks are those shares, which are traded by the company in open market, and these shares are not eligible for bonus and do not have voting rights.Sources said in a statement that Mallya is interested in selling the stake in USL to raise funds to retire debt.United Spirits has over 150 products in its portfolio, including the brands Black Dog, Signature, Royal Challenge and Romanov.
Friday, June 29, 2007
Tatas in race for Cadbury business
The Tata group is back to deal making in the US beverage market. The salt-to-software group is likely to submit a bid for Cadbury Schweppes’ US beverages business in an attempt to capture the hugely-successful Snapple range of fruit, diet drinks and iced teas.
The group is in talks with private equity funds which are interested in the beverages business and could join US giant Blackstone, Lion Capital as a minor partner in their consortium. The UK-headquarted Cadbury Schweppes is looking to offload the US beverage business as part of a global restructuring that will separate confectionery and beverage businesses.
The audacious move is part of the Tata group’s efforts to emerge as a big global player in its key businesses.Tata Tea has been expanding its portfolio and diversifying its product range in order to insulate itself from sluggish growth in core businesses like tea and coffee. In the past two years, the company has bought specialist tea maker Good Earth and coffee firm Eight O’ Clock Coffee in the US, before making an attempt for Glaceau, the maker of enhanced water products such as vitamin water and smart water.
The Tata group is not interested in the entire beverages portfolio which also includes brands like Dr Pepper. It is keen on Snapple though, a 35-year-old brand launched in the Greenwich village area of New York by three childhood friends in 1972. If the Blackstone consortium emerges as winner, the Tata group wants the right to carve out Snapple and make it a part of its portfolio. The group’s financial exposure in the deal is estimated to be just over $2 billion, which could be funded by own funds and some borrowings.
(Source: Economic Times)
The group is in talks with private equity funds which are interested in the beverages business and could join US giant Blackstone, Lion Capital as a minor partner in their consortium. The UK-headquarted Cadbury Schweppes is looking to offload the US beverage business as part of a global restructuring that will separate confectionery and beverage businesses.
The audacious move is part of the Tata group’s efforts to emerge as a big global player in its key businesses.Tata Tea has been expanding its portfolio and diversifying its product range in order to insulate itself from sluggish growth in core businesses like tea and coffee. In the past two years, the company has bought specialist tea maker Good Earth and coffee firm Eight O’ Clock Coffee in the US, before making an attempt for Glaceau, the maker of enhanced water products such as vitamin water and smart water.
The Tata group is not interested in the entire beverages portfolio which also includes brands like Dr Pepper. It is keen on Snapple though, a 35-year-old brand launched in the Greenwich village area of New York by three childhood friends in 1972. If the Blackstone consortium emerges as winner, the Tata group wants the right to carve out Snapple and make it a part of its portfolio. The group’s financial exposure in the deal is estimated to be just over $2 billion, which could be funded by own funds and some borrowings.
(Source: Economic Times)
Friday, June 1, 2007
Tata Tea to acquire majority stake in Mt Everest
Everest will be making a preferential allotment to Tata Tea, reports CNBC-TV18. The company’s promoters also plan to sell 11% stake to Tata Tea. With this, Tata Tea is set to acquire majority stake in the company.
Tata Tea will also make an open offer to Mt Everest shareholders at Rs 145-150 per share. The board will convene on June 1 to approve the acquisition. It will invest nearly Rs 250 crore for the stake buy.
Post open offer, Tata Tea aims to hold 42% stake and get management control of Mt Everest. CNBC-TV18 reported on Tata Tea's bid for Mt Everest in November 2006.
Tata Tea will also make an open offer to Mt Everest shareholders at Rs 145-150 per share. The board will convene on June 1 to approve the acquisition. It will invest nearly Rs 250 crore for the stake buy.
Post open offer, Tata Tea aims to hold 42% stake and get management control of Mt Everest. CNBC-TV18 reported on Tata Tea's bid for Mt Everest in November 2006.
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