| Consumer and Industrial Products |
The Consumer and Industrial products sector is vast in its import and includes both B2B and B2C businesses. India with its large domestic and young population is likely to be a growing market for goods and services. Therefore, this sector specially businesses with consumer connect and local brands is an area of key interest for us. This interest encompasses companies that are involved in the manufacture and sales of food/food products, beverages, household products, personal products, electricals and all products that directly touch the consumer.
The deal activity in the Consumer and Industrial products space has always been present and is likely to be there both in terms of volume and value in the future. Some of the growth drivers that can be attributed to this escallation are rising income levels of middle class, increased urbanization, increased demand from consumers for premium products and services in the rural belt.
Some of the prominent M&A transactions that have taken place in the Consumer and Industrial products sector include Diageo’s acquisition of 25% stake in United Spirits from United Breweries Group for Rs 5312 crores in 2013, Apollo tyres’ acquisition of NSE listed Cooper Tire and Rubber company for Rs 14500 crores in an all cash deal and Jyothy Laboratories’ acquisition of majority stake in Henkel India in for Rs 187 crores in 2011 among others.
Some of the notable private equity transactions that have taken place in the Consumer and Industrial products sector include Standard Chartered Private Equity’s $32 Mn follow on investment in Varun Beverages International, the largest bottler for PepsiCo in South Asia;ICICI venture’s Rs 250 crs investment for 10% stake in Devyani International which operates more than 200 food and beverage outlets across the country including Yum Restaurants-owned Pizza Hut and KFC as well as UK coffee chain Costa Coffee among other such deals.
Consumer and Industrial products sector has been showing steady growth and promises immense future potential in the midst of a challenging economy largely due to its wide reach and consumer connect. Our first deal in this sector was our involvement in a PE Transactionwhere Future Ventures picked up 33.3% stake in KFC Shoemakerwhich own and retails Tresmode’ and Solovoga brands of footwear across the country. We are presently looking at other deals in the sector. Our deal team has in-depth knowledge and relationships within the sector to help our clients.
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