Stock Report

Nestle India Ltd to acquire Pet Foods Business from Purina PetCare India Private Limited

Posted On : 2022-07-29 09:34:41( TIMEZONE : IST )

The Board of Directors of Nestle India Ltd, at their meeting held today based on the approval of the Audit Committee, approved acquisition of Pet Foods Business from Purina PetCare India Private Limited through business transfer, proposed with effect from 1st October 2022.

Since December 2017, Purina Petcare India has been undertaking the marketing and sale of PFB (dry dog and dry cat foods) under globally recognised brands such as Purina Supercoat, Purina Pro Plan and Purina Friskies. Purina Petcare India has in the first half of 2022 commenced marketing and sale of wet cat foods under globally recognised brand Fancy Feast. The products are imported from Nestle Thailand and Nestle Australia. Purina Petcare India does not have any manufacturing facility in India. The business transfer (slump sale) would entail transfer of all assets and liabilities related to PFB including employees of Purina Petcare India. As on 31st March 2022, Purina Petcare India held Cash and Cash equivalent of Rs.43.9 million and Debt and Debt like items of Rs.4.1 million. For the financial year ended 31 st March 2022, Purina Petcare India had a turnover of Rs.360.8 million.

The Company will get access to the Pet Foods Business which has been growing in India at a Compounded Annual Growth Rate (CAGR) during 2018-21 of 39.4% and is estimated to grow ' at a CAGR (2022-26) of 50%. This includes the access to world class proprietary know how, technology and brands related to pet foods, that would become accessible under the General License Agreement.

Post the pandemic the category has accelerated to smaller towns and in general retail stores and on e-commerce. With faster rate of pet adoption along with portfolio and town expansion opportunities, there are significant synergies upon integrating PFB of Purina Petcare India into Nestle India Limited to help unleash the full potential.

Pet Foods Business would benefit from the wider distribution and supply chain network of Nestle India Limited to effectively reach in 120+ towns and accelerate in Organized Trade.

The transfer of PFB to Nestle India is proposed from 1st October 2022.

The Company and Nestle Group have agreed to a value of Rs 1,235 Million as the consideration for the purchase of PFB, which works out to around 3.4 times the turnover of Purina Petcare India for the financial year ended 31st March 2022.

Shares of Nestle India Limited was last trading in BSE at Rs. 19104.45 as compared to the previous close of Rs. 18544.65. The total number of shares traded during the day was 7230 in over 2949 trades.

The stock hit an intraday high of Rs. 19330.85 and intraday low of 18460.00. The net turnover during the day was Rs. 137101810.00.