L Catterton picks up minority stake in Haldiram’s

MUMBAI: US-based private equity (PE) firm L Catterton has picked up a minority stake in Haldiram Snacks Food amid a rush among investors to take a bite of India’s growing consumer market. The latest investment in Haldiram’s, known for its wide range of namkeen (snacks), sweets and ready to eat products comes less than a year after Singapore’s Temasek, UAE’s IHC and American firm Alpha Wave Global collectively acquired over 10% stake in the snacks brand in the biggest local PE consumer deal at a valuation of $10 billion.

L Catterton did not disclose the specifics of the transaction but people aware of the matter said that it’s a minority investment. Queries sent to a company spokesperson did not elicit any response.

The investment has been made from L Catterton's $400 million India focused fund (reached first close earlier this year) through which it plans to deploy capital in the range of $25-$150 million in a clutch of companies.

Deals in the local snacks space have heated up with investors vying for a share of the segment that broadly caters to the masses. India’s savoury snacks market is pegged at $6.2 billion. Besides Haldiram’s for which investors are making a beeline, Rajkot’s Balaji Wafers is also set to bag an investment from General Atlantic at a valuation of Rs 35,000 crore. The new generation of family run traditional businesses such as Haldiram’s and Balaji Wafers want to bring professional investors on board to scale their companies and take them global. This year, there’s been a flurry of activity in the broader foods (both packaged food and food services) space in general—ChrysCapital, for instance, bought bakery chain Theobroma in a more than Rs 2,000 crore deal.

A partnership with L Catterton which is backed by French luxury group LVMH and Groupe Arnault, the family holding company of LVMH CEO Bernard Arnault will allow Haldiram’s to tap into the PE investor’s global consumer sector expertise and wide industry network. Through the deal, Haldiram’s which is eyeing an IPO in the future, will “endeavour to foster a global India for the world brand,” L Catterton said in a statement on Thursday. “This will involve unlocking further value via a comprehensive range of initiatives in areas such as brand building, new product development, supply chain and distribution optimisation, geographic expansion, as well as talent development,” the PE firm said.

For L Catterton, the deal means broadening its footprint in the Indian consumer market where there is steep competition from other investors. Last year, the firm roped in former Hindustan Unilever (HUL) chief Sanjiv Mehta as executive chairman for India, a move seen as speeding up its India expansion.

L Catterton has made more than 275 investments in consumer brands globally and has backed Indian companies such as Drools, Farmley and Sugar Cosmetics. “We are delighted to back Haldiram’s and drive further growth in India’s evolving and flourishing consumer market, as well as galvanise its internationalisation,” Mehta said.