Adani Wilmar to acquire Tops ketchup maker G.D. Foods

Packaged goods company Adani Wilmar Ltd on Tuesday signed the deal to take over smaller player G.D. Foods Manufacturing (India) Pvt. Ltd, the maker of Tops ketchup and noodles.

The acquisition will be executed in multiple tranches, with 80% of the shares to be bought in the first tranche at an enterprise value of ₹603 crore, and the remaining 20% to be acquired over the next three years, Adani Wilmar said in a stock exchange filing.

Mint reported in September that the Adani Group had built a $1 billion war chest for acquisitions aimed at boosting the conglomerate’s food and packaged goods business.

“The price per share for the first tranche, i.e., 80% of shares, has been arrived at an agreed enterprise value of ₹603 crore (on a debt-free and cash-free basis) for the tranche 1 closing. For subsequent tranches, the price per share shall be arrived at on the basis of an enterprise value to be calculated by a predetermined method as set out in the share purchase agreement,” the filing said.

In 2023-24, G.D. Foods earned a revenue of ₹386 crore and recorded an Ebitda of ₹32 crore. Ebitda stands for earnings before interest, taxes, depreciation, and amortisation.

The acquisition is subject to meeting customary closing conditions, with the first tranche expected to close in 60 days. The transaction will be funded by internal accruals or public listing proceeds.

The deal signifies Adani Wilmar’s strategy to cater to the evolving needs of Indian households.

“As the market evolves, there is a clear need for trusted national food FMCG brands to deliver high-quality, affordable products that fulfil the essential needs of Indian kitchens. Delivering on this requires best-in-class manufacturing operations and a broad distribution reach, both of which are key strengths of Adani Wilmar,” said Angshu Mallick, managing director and chief executive, Adani Wilmar.

Founded in 1984, G.D. Foods’ owned brand Tops sells tomato ketchup, snack sauce, speciality and culinary sauces, jams, pickles, noodles, instant mixes, corn and choco flakes and cooking essentials such as vinegar, baking powder, cake mix, and corn flour.

Headquartered in Delhi, the company’s sales are mainly concentrated in seven states in North India, with a retail presence across more than 150,000 outlets.

Adani Wilmar is a joint venture between Adani Group of India and Wilmar Group of Singapore. The company sells kitchen essentials, including edible oil, wheat flour, rice, pulses, besan and sugar. It sells products under the Fortune and Kohinoor brands.

“We will further invest in the brand and significantly increase the distribution reach of all its products. This acquisition will lead to the significant addition of the margin-accretive products in our portfolio,” said Mallick.

The company reported revenues of ₹51,262 crore in 2023-24; profit was down from ₹582 crore in 2022-23 to ₹148 crore in the same period.

Adani Wilmar competes with companies such as Marico Ltd, ITC Ltd and Tata Consumer Products Ltd in the packaged foods market.