Tata Consumer Products Limited (NSEI:TATACONSUM) (TCPL) is all set to announce two marquee transactions ? the acquisitions of Capital Foods Private Limited, the maker of condiments, food products, and ingredients under the Ching's Secret and Smith & Jones brands as well as Organic India Private Limited, the Fabindia-backed organic teas and health products maker, ending months of negotiations, said people in the know. The acquisitions will help the company gain access to products with a wider taste profile, enter new markets and broaden its portfolio with organic items that appeal to consumers seeking healthy alternatives.

The formal announcement is expected by early next week. TCPL will be buying 75% of Capital Foods from existing investors Invus Group, a European family office and investment arm, with a 40% stake; US private equity group General Atlantic Service Company, L.P. that owns 35% valuing the company at INR 51,000 million. That would peg the stake value at INR 38,250 million.

Invus is a European family office and investment arm. Founder chairman of Capital Foods and a former advertising boss turned food entrepreneur Ajay Gupta will retain his 25% stake for now but Tatas will buy him out too in future helping him unlock further value. TCPL will also be buying a controlling stake in Organic India for a INR 18,000 million valuation from Fab India.

Fabindia is backed by Premji Invest and Lighthouse Capital, and owns over 40% stake in Organic India, based in Lucknow. ET in its September 21 edition was the first to report that TCPL was the frontrunner for Capital Foods, that since 1995 had created a unique niche by launching a series of products with ?desi? flavours.

These include Ching?s Secret instant noodles, soups, condiments, curry pastes and frozen entrees along with the Smith & Jones range of ginger-garlic paste, niche sauces and baked beans. Goldman Sachs since late 2022 had launched a formal sale process that attracted the likes of Nestle the world's largest foods company, and The Kraft Heinz Co, Norwegian food giant Orkla, owners of MTR Foods among others. Kotak Mahindra has been advising Tatas.

ET in its August 4 edition was also the first to report that Tatas and ITC were eyeing a significant stake in Organic India the maker of a wide range of premium organic teas and foods supplements. The acquisition of Tatas will now pit TCPL directly against Nestle?s Maggi, which leads the INR 50,000 million branded instant noodles market with a 60% share. The Maggi franchise is part of Nestle?s prepared dishes and cooking aids business.

Other players in the category include Top Ramen, Wai Wai and Patanjali. Organic and wellness products have been growing in high-double digits, specially post Covid-19, and are forecasted to reach INR 750,000 million by 2025, according to the 'Indian Organic Sector Vision 2025' report by the commerce ministry. But Capital Foods and Organic India will be the first significant acquisitions in several years by Tata Consumer which had been focused on sharpening and scaling up its inhouse portfolio of brands.

The portfolio of Capital Foods will especially get the heft of Tata Consumer's distribution network and marketing muscle, said highly placed officials close to the development. Tata Consumer will have access to an expanded global Indian diaspora with brands that have a pan Indian cuisine unlike the other more regional centric brands. The Tata company will also get brands that offer better business margins in the food space, officials said.

Tatas declined to comment. GA, Invus was not available for comment. Mails sent to Ajay Gupta and FabIndia spokesperson on Jan.

11, 2024 evening did not generate any response till press time.