Oslo / NO. (ok) Orkla ASA has completed the purchase of 67.82 percent of the shares in Eastern Condiments Private Limited. The acquisition has been carried out through MTR Foods Private Limited. The purchase price values Eastern at a total of approximately NOK 2.4 billion at enterprise value.
With this acquisition, Orkla will be a major employer in India, owning nine factories in six states which cater to the whole of India as well as exports, and employing more than 4,000 people in the country.
Eastern has been owned by the Meeran family (74 percent) and McCormick Ingredients South East Asia Private Limited («McCormick») (26 percent). Orkla has purchased 41.82 percent from members of the Meeran family and McCormick‘s entire ownership interest.
As described in Orkla’s stock exchange notification in September 2020, Eastern will be merged into MTR Foods. Following the merger, Orkla will own 90.01 percent and the brothers Firoz and Navas Meeran will together own 9.99 percent. The merger process is expected to take around 15 months.
«I am very pleased that the acquisition has now been completed. It is important in order for Orkla to deliver on our strategy of strengthening our footprint in our core areas. MTR Foods and Eastern are both iconic Indian brands in a rapidly growing Indian market. MTR Foods has been an amazing success story for Orkla, and sales revenues have increased five-fold since Orkla entered the picture in 2007. We are now looking forward to continuing our India journey,» says Orkla President and CEO Jaan Ivar Semlitsch.
«Eastern and MTR offer complementary products. Pursuant to the deal, we will now together be able to offer a broader selection of food products to Indian consumers,» says EVP Atle Vidar Nagel-Johansen, CEO of Orkla Foods and Chair of the Board of MTR Foods.
«Eastern and MTR Foods have products that are a good fit. The companies have an attractive pan-Indian geographical presence and good export possibilities. The Indian food and spice market shows double-digit growth. We see that a more urban lifestyle and greater buying power is having a positive long-term impact on demand for our products,» says Sanjay Sharma, CEO of MTR Foods.
Eastern has seven factories in four different states in India, and around 3,000 employees. The company’s headquarters is located in Edappally, Kochi.
Eastern was established in 1983 by M. E. Meeran. In the last 12 months ending 30 June 2020, the company achieved a turnover of INR 9.0 billion (approximately NOK 1.1 billion) and normalised EBITDA of INR 1.1 billion (approximately NOK 129 million). Turnover increased by close to 8 percent per year in the 2014-2020 period. Around half the turnover comes from Kerala, and the other half derives from sales in other states in India and exports. The company will be consolidated into Orkla’s financial statements as of 1 April 2021.
MTR Foods was established in 1924 and has been part of Orkla since 2007. MTR Foods is recognised for its excellent brand-building, stable leadership, solid financial position, productivity improvements, and leading food safety and EHS standards. In addition to good growth in India, MTR Foods products are now available in 32 countries around the world, of which North America, Australia and New Zealand are the biggest markets. MTR Foods has two factories located in Bangalore, Karnataka and Pune, Maharashtra, and is headquartered in Bangalore. The business has 1,018 employees and achieved a turnover of INR 9.2 billion (approximately NOK 1.2 billion) in 2020.
