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Zydus, Cadila to acquire Heinz India for Rs 4,595 crore

Ahmedabad-based Zydus Wellness announced today that it has entered into a definitive agreement to acquire Heinz India at a valuation of Rs 4,595 crore.

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Ahmedabad-based Zydus Wellness announced today that it has entered into a definitive agreement to acquire Heinz India at a valuation of Rs4,595 crore. The acquisition, being done jointly with its parent company Cadila Healthcare, is expected to catapult Zydus amongst the leading consumer health businesses in India.

Zydus said in a statement that the valuation of Rs4,595 crore includes net working capital of Rs40 crore, cash of Rs15 crore, and assumes no debt. The transaction is being financed by a mix of equity and debt. The company said that leading PE firms would partner the transaction by way of equity support.

Heinz India's business comprises brands such as Complan, Glucon D, Nycil and Sampriti Ghee, two manufacturing facilities in Aligarh and Sitarganj, and teams working in operations, research, sales, marketing and support. It recorded revenue of Rs1,150 crore and EBIDTA of Rs225 crore for the four brands for the 12-month period ending June 2018. Following the acquisition, Zydus will have consolidated revenues of about Rs1,700 crore, almost three times the existing revenues.

“This development offers immense opportunity to broaden our portfolio and invest in brands and products that we believe are most relevant to health conscious consumers. This acquisition will be an ideal addition to Zydus Wellness. We strongly believe that we will further enhance value to all these marquee brands,” Sharvil Patel, chairman of Zydus Wellness, said.

This will be the second acquisition for Zydus following the takeover of Nutralite, the country's largest selling premium healthy fat spread in 2006.

Besides Nutralite, Zydus owns strong brands like Sugar Free and EverYuth.

“The transaction is expected to close in the fourth quarter of FY19, subject to regulatory approvals,” Zydus said, adding that the transaction is expected to be EPS accretive.

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