Zydus Wellness, Cadila Healthcare jointly acquire Complan-owner Heinz India for Rs 4,595 crore

Zydus Wellness Ltd, which spearheads the consumer business of the Zydus group, will be acquiring Heinz India Private Limited, a subsidiary of Kraft Heinz. In a regulatory filing today, the company disclosed that it has signed definitive agreements to acquire Heinz India jointly with Cadila Healthcare Ltd. at a valuation of Rs 4,595 crore.

"This valuation includes net working capital of Rs 40 crore, cash of Rs 15 crore and assumes no debt. The transaction is expected to close in Q4 FY19, subject to regulatory approvals," it said in a statement. "With this acquisition, the turnover of Zydus Wellness will be approx. Rs 1,700 crore, making it one of the strongest players in the fast-growing consumer healthcare market." In fact, the acquisition is expected to create consolidated revenues three times its current size.

Heinz India's business comprises four well-entrenched brands such as Complan, Glucon D, Nycil and Sampriti Ghee, which collectively posted revenues of around Rs 1,150 crore the 12-month period ending June 30, 2018. The deal is expected to create enhanced infrastructure and distribution reach for Zydus Wellness with a combined strength of five manufacturing facilities, 1,800 distributors and nearly 2 million customer touchpoints.

"This acquisition will be an ideal addition to Zydus Wellness, supporting our aspirations to grow in the consumer wellness space by providing multiple choices to consumers," said Dr. Sharvil Patel, Chairman, Zydus Wellness, which boasts brands like SugarFree, EverYuth and Nutralite.

According to the company, the transaction is proposed to be financed by a mix of equity and debt. "Select leading private equity firms have committed to partnering the transaction by way of equity support. The transaction is expected to be EPS accretive," it added.

This will be the second acquisition for Zydus Wellness following the acquisition of Nutralite in 2006.

(Edited by Sushmita Choudhury Agarwal)