In an all-cash deal, Heritage Foods Limited acquired 100% of equity shares in Vaman Milk Foods, whose business is mainly in the processing and packaging of liquid milk and related milk products. The value of the deal was not disclosed.
Vaman Milk Foods had registered tremendous growth within the last financial year. It recorded an annual turnover of Rs1,296.16 lakhs (about US$1.98m) on Mar 31. This was a whopping 185% growth from its annual turnover in the previous financial year.
In a filing to the stock exchange, Umakanta Barik, company secretary of Heritage Foods stated: “The objective of the transaction is to expand the dairy business to meet future market growth.”
This is the second acquisition by Heritage Foods within this year. In April, the company had acquired the dairy business of Reliance Retail Ltd, expanding its mainly South Indian business further north of India to Punjab, Uttarakhand and Rajasthan.
Then, Heritage Foods had also announced five new production facilities: three in Punjab and two in Haryana. The Vaman Milk Foods acquisition further strengthens its business in northern India.
Other Indian states in which Heritage Foods’ milk and milk products are carried include Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nadu, Maharastra, Odisha, NCR Delhi, Madhya Pradesh, Uttar Pradesh and Gujarat.
On the expected duration for the completion of the transaction, the statement to the stock exchange said: “It is estimated to take around 30 days.”
The annual turnover of Heritage Foods crossed Rs.2642.89 crores (close to US$404.3m) in the financial year 2016-2017.
Apart from dairy, Heritage Foods also has business divisions in the renewable energy and veterinary care sectors.