A super merger is on the horizon.
The investment community has learned that Blackstone is leading negotiations with Indian food giant Haldiram's to acquire a majority stake in its snack business, which is valued at up to US$8.5 billion (about 60 billion yuan).
Just like replicating the successful experience in China in the past, Blackstone Buyout bullets are still the first to target industries that people just need such as "clothing, food, housing and transportation". Haldiram's, the target company, is a well-known food chain in India, with about 1,000 distributors in India.
In the latest news, Bain Capital and Temasek have joined forces to participate in the transaction competition. Sure enough, PE giants like to buy and acquire deals of tens of billions of dollars at every turn, which can be regarded as a portrayal of this year's merger and acquisition boom.
60 billion, Blackstone's biggest deal this year
More details leak out: A consortium led by Blackstone has submitted a non-binding bid to negotiate a majority stake in Indian food company Haldiram's, which values it at up to $8.5 billion, people familiar with the matter confirmed.
But the competition is fierce. On the one hand, Blackstone is leading the coalition between GIC and Abu Dhabi Investment Authority (ADIA); On the other hand, Bain Capital and Temasek also submitted a non-binding offer with a valuation of about $8 billion to $8.5 billion.
In fact, last year, Tata Group, one of India's largest companies, also expressed its intention to cooperate with Haldiram's, intending to acquire control of its snack and restaurant business. At the time, Haldiram's was valued at $10 billion. But due to hesitation over valuation, the deal fell through.
It's not hard to see that the target Haldiram's is hot.
Haldiram's is a household name in India, with 1,000 distributors and 7 million points of sale. According to the world's authoritative research institutions, Haldiram's has a market share of nearly 13% in the Indian savory snack market. In addition, its products are exported to many countries, including Japan, Russia, the United Kingdom, Australia, etc.
In summary, Haldiram's scale far ahead of its competitors, its growing revenues, and healthy EBITDA (earnings before interest, taxes, depreciation and amortization) make it an irresistible compel for PE giants such as Blackstone and Bain.
Once completed, this will be the largest private equity merger in India.
Buy the Indian food overlord
PEs have historically been fond of consumer mergers and acquisitions
Haldiram's始于八十多年前。
The story also begins with Ganga Bhishen Agarwal. Initially, he joined the family food stall job and learned the recipe from his aunt.
In order to sell the food better, Ganga Bhishen added a new lentil flour to a snack previously made from chickpea flour, thus reinventing the bhujia. Soon, his products became popular in India. With the new brand, he parted ways with his grandfather's business. Perhaps it was his mother who called him Haldiram, thus kicking off his business empire, Haldiram's.
Haldiram's expansion has also had a humble beginning. By chance, Ganga Bhishen went to Kolkata for a wedding, which gave him the idea to set up shop there. It was also the first branch of its Bhujia business.
Later, Haldiram's grew into a family business. It wasn't until his grandson, Shiv Kishan Agrawal, joined the company that he was determined to make bhujia go to all of India. In 1970, the company moved its base to Nagpur and opened its first full-fledged production department to market a wide range of delicious savoury foods, confectionery and beverages.
It can be said that the passing of Haldiram's to the third generation was a turning point.
Since then, Haldiram's has continued to expand. On the one hand, the company has diversified into a number of sub-brands through continuous acquisitions. In January of this year, it also entered the chocolate segment under the Cocobay brand in order to expand its business to more areas. On the other hand, Haldiram's also operates in countries such as the United Kingdom, the United States, Japan, etc., through franchisees.
Haldiram's为何经历多代屹立不倒?
Behind this is the values that Shiv Kishan Agrawal has set for the company – to keep tradition and quality intact. At Haldiram's, they emphasize that all products are natural, healthy, and have a homemade feel. There is a strict set of processes at all stages, from the farm, to production to packaging. If you're looking to try Indian food, then the Haldiram's chain of stores on the streets is sure to be the most hygienic and delicious option.
(Haldiram's 最受欢迎的小吃之一"bhujia")
In April last year, with the approval of the Competition Commission of India (CCI), Haldiram's Nagpur and Delhi operations were merged. It is reported that the combined revenue of its snack business in FY2024 is expected to be Rs 14,500 crore. Over the past five years, the business has grown at a compound annual revenue growth rate of 18% and an average EBITDA margin of 14%-15%. The attractive performance has made PEs eye.
This is also a portrayal of PE's preference for mergers and acquisitions in the consumer industry. In contrast, consumption typically has a large market size and sustained growth potential. Even in the economic downturn, people's basic needs for food, clothing, shelter and transportation still exist.
As a result, the consumer sector has become a safe haven for PEs looking for stable returns. Looking back on the growth of PE giants, there are many classic cases of consumer buyout behind almost every one of them - Blackstone's acquisition of Hilton, KKR's acquisition of the Safeway supermarket chain, Carlyle's acquisition of McDonald's China with CITIC Capital, and Hillhouse's privatization of Belle...... All of them bring them super returns.
The stronger the wind and waves, the more expensive the fish
Prelude to a major merger
It's not hard to see a hint of the wind: PE giants are becoming more enthusiastic about Buyout.
The so-called buyout, or "controlling M&A", refers to the purchase of a majority or controlling stake in a company, and then through drastic changes such as restructuring the business and cutting costs, the underlying assets will appreciate. The high threshold has made Buyout always regarded as the crown jewel of the investment world.
Remember last week, Silver Lake Capital announced that its seventh flagship fund had raised $20.5 billion, creating the largest flagship fund in its history. One of the surprises is that the new fund will abandon minority investments and focus on large buyouts.
The reason behind this is very realistic - it turned out that during the epidemic in 2021, Silver Lake Capital made some smaller, minority growth investments, but the returns were not ideal. On the other hand, the better performing cases in the funds are almost always concentrated in large investments.
正如银湖资本联席CEO Greg Mondre所言：
“The returns are substantially higher when the bets are bigger.” （赌注越大，回报就越高）
This idea will undoubtedly bring reference significance to China's private equity investment industry on the other side of the ocean. When the IPO money-making effect is getting weaker and weaker, Buyout is a way to be pinned on by PE. A local venture capital boss once lamented that every PE investor has a heart to be a buyout.
In March this year, Daniel Zhang, former chairman and CEO of Alibaba Group, also announced that he would join Morning One Fund as a managing partner with founder Liu Xiaodan, focusing on the new future of M&A investment. When the wave of mergers and acquisitions started, Buyout also began to set off heated discussions.
However, domestic buyout has not yet ushered in an explosive moment. The Qingke Research Center has pointed out that compared with the United States, the number and scale of China's local buyout funds are far from enough. To this day, there are still few successful cases of buyout in China. Among them, Hillhouse's privatization of Belle in 2017 is one of the few classic cases.
It's not hard to see why. From the perspective of capital, the term of Buyout funds is generally at least 5-10 years, while China's equity investment market lacks long-term funds all year round. Due to the limited investment period, it is difficult for many local PE funds to try buyout. At the same time, to buy the control of a company means that the investment amount of billions or even tens of billions of dollars is unrealistic for many PEs.
On the other hand, compared with minority equity investment, Buyout has a higher threshold - the transaction is more complex and requires higher post-investment management. Being able to buy good assets is only the beginning of Buyout, and the real test lies in the post-investment operation.
After Hillhouse became the controlling shareholder of Belle, it began to transform and empower Belle, and once more than 120 employees of Hillhouse's digital post-investment empowerment team entered Belle to work, so that this "dying" brand was reborn.
It can be said that from identifying excellent targets, to bidding, operation, and finally selling, every link is a huge test. As Hu Xiaoling, founding partner of CDH Investments, warned at the recent annual meeting of Mulan in China's business circles, the future may enter an era of turbulent mergers and acquisitions, "but the failure rate of mergers and acquisitions is 80%", so we should be in awe.
The prologue has begun, but the journey is still long. A super merger is on the horizon.
The investment community has learned that Blackstone is leading negotiations with Indian food giant Haldiram's to acquire a majority stake in its snack business, which is valued at up to US$8.5 billion (about 60 billion yuan).
Just like replicating the successful experience in China in the past, Blackstone Buyout bullets are still the first to target industries that people just need such as "clothing, food, housing and transportation". Haldiram's, the target company, is a well-known food chain in India, with about 1,000 distributors in India.
In the latest news, Bain Capital and Temasek have joined forces to participate in the transaction competition. Sure enough, PE giants like to buy and acquire deals of tens of billions of dollars at every turn, which can be regarded as a portrayal of this year's merger and acquisition boom.
60 billion, Blackstone's biggest deal this year
More details leak out: A consortium led by Blackstone has submitted a non-binding bid to negotiate a majority stake in Indian food company Haldiram's, which values it at up to $8.5 billion, people familiar with the matter confirmed.
But the competition is fierce. On the one hand, Blackstone is leading the coalition between GIC and Abu Dhabi Investment Authority (ADIA); On the other hand, Bain Capital and Temasek also submitted a non-binding offer with a valuation of about $8 billion to $8.5 billion.
In fact, last year, Tata Group, one of India's largest companies, also expressed its intention to cooperate with Haldiram's, intending to acquire control of its snack and restaurant business. At the time, Haldiram's was valued at $10 billion. But due to hesitation over valuation, the deal fell through.
It's not hard to see that the target Haldiram's is hot.
Haldiram's is a household name in India, with 1,000 distributors and 7 million points of sale. According to the world's authoritative research institutions, Haldiram's has a market share of nearly 13% in the Indian savory snack market. In addition, its products are exported to many countries, including Japan, Russia, the United Kingdom, Australia, etc.
In summary, Haldiram's scale far ahead of its competitors, its growing revenues, and healthy EBITDA (earnings before interest, taxes, depreciation and amortization) make it an irresistible compel for PE giants such as Blackstone and Bain.
Once completed, this will be the largest private equity merger in India.
Buy the Indian food overlord
PEs have historically been fond of consumer mergers and acquisitions
Haldiram's始于八十多年前。
The story also begins with Ganga Bhishen Agarwal. Initially, he joined the family food stall job and learned the recipe from his aunt.
In order to sell the food better, Ganga Bhishen added a new lentil flour to a snack previously made from chickpea flour, thus reinventing the bhujia. Soon, his products became popular in India. With the new brand, he parted ways with his grandfather's business. Perhaps it was his mother who called him Haldiram, thus kicking off his business empire, Haldiram's.
Haldiram's expansion has also had a humble beginning. By chance, Ganga Bhishen went to Kolkata for a wedding, which gave him the idea to set up shop there. It was also the first branch of its Bhujia business.
Later, Haldiram's grew into a family business. It wasn't until his grandson, Shiv Kishan Agrawal, joined the company that he was determined to make bhujia go to all of India. In 1970, the company moved its base to Nagpur and opened its first full-fledged production department to market a wide range of delicious savoury foods, confectionery and beverages.
It can be said that the passing of Haldiram's to the third generation was a turning point.
Since then, Haldiram's has continued to expand. On the one hand, the company has diversified into a number of sub-brands through continuous acquisitions. In January of this year, it also entered the chocolate segment under the Cocobay brand in order to expand its business to more areas. On the other hand, Haldiram's also operates in countries such as the United Kingdom, the United States, Japan, etc., through franchisees.
Haldiram's为何经历多代屹立不倒?
Behind this is the values that Shiv Kishan Agrawal has set for the company – to keep tradition and quality intact. At Haldiram's, they emphasize that all products are natural, healthy, and have a homemade feel. There is a strict set of processes at all stages, from the farm, to production to packaging. If you're looking to try Indian food, then the Haldiram's chain of stores on the streets is sure to be the most hygienic and delicious option.
(Haldiram's 最受欢迎的小吃之一"bhujia")
In April last year, with the approval of the Competition Commission of India (CCI), Haldiram's Nagpur and Delhi operations were merged. It is reported that the combined revenue of its snack business in FY2024 is expected to be Rs 14,500 crore. Over the past five years, the business has grown at a compound annual revenue growth rate of 18% and an average EBITDA margin of 14%-15%. The attractive performance has made PEs eye.
This is also a portrayal of PE's preference for mergers and acquisitions in the consumer industry. In contrast, consumption typically has a large market size and sustained growth potential. Even in the economic downturn, people's basic needs for food, clothing, shelter and transportation still exist.
As a result, the consumer sector has become a safe haven for PEs looking for stable returns. Looking back on the growth of PE giants, there are many classic cases of consumer buyout behind almost every one of them - Blackstone's acquisition of Hilton, KKR's acquisition of the Safeway supermarket chain, Carlyle's acquisition of McDonald's China with CITIC Capital, and Hillhouse's privatization of Belle...... All of them bring them super returns.
The stronger the wind and waves, the more expensive the fish
Prelude to a major merger
It's not hard to see a hint of the wind: PE giants are becoming more enthusiastic about Buyout.
The so-called buyout, or "controlling M&A", refers to the purchase of a majority or controlling stake in a company, and then through drastic changes such as restructuring the business and cutting costs, the underlying assets will appreciate. The high threshold has made Buyout always regarded as the crown jewel of the investment world.
Remember last week, Silver Lake Capital announced that its seventh flagship fund had raised $20.5 billion, creating the largest flagship fund in its history. One of the surprises is that the new fund will abandon minority investments and focus on large buyouts.
The reason behind this is very realistic - it turned out that during the epidemic in 2021, Silver Lake Capital made some smaller, minority growth investments, but the returns were not ideal. On the other hand, the better performing cases in the funds are almost always concentrated in large investments.
正如银湖资本联席CEO Greg Mondre所言：
“The returns are substantially higher when the bets are bigger.” （赌注越大，回报就越高）
This idea will undoubtedly bring reference significance to China's private equity investment industry on the other side of the ocean. When the IPO money-making effect is getting weaker and weaker, Buyout is a way to be pinned on by PE. A local venture capital boss once lamented that every PE investor has a heart to be a buyout.
In March this year, Daniel Zhang, former chairman and CEO of Alibaba Group, also announced that he would join Morning One Fund as a managing partner with founder Liu Xiaodan, focusing on the new future of M&A investment. When the wave of mergers and acquisitions started, Buyout also began to set off heated discussions.
However, domestic buyout has not yet ushered in an explosive moment. The Qingke Research Center has pointed out that compared with the United States, the number and scale of China's local buyout funds are far from enough. To this day, there are still few successful cases of buyout in China. Among them, Hillhouse's privatization of Belle in 2017 is one of the few classic cases.
It's not hard to see why. From the perspective of capital, the term of Buyout funds is generally at least 5-10 years, while China's equity investment market lacks long-term funds all year round. Due to the limited investment period, it is difficult for many local PE funds to try buyout. At the same time, to buy the control of a company means that the investment amount of billions or even tens of billions of dollars is unrealistic for many PEs.
On the other hand, compared with minority equity investment, Buyout has a higher threshold - the transaction is more complex and requires higher post-investment management. Being able to buy good assets is only the beginning of Buyout, and the real test lies in the post-investment operation.
After Hillhouse became the controlling shareholder of Belle, it began to transform and empower Belle, and once more than 120 employees of Hillhouse's digital post-investment empowerment team entered Belle to work, so that this "dying" brand was reborn.
It can be said that from identifying excellent targets, to bidding, operation, and finally selling, every link is a huge test. As Hu Xiaoling, founding partner of CDH Investments, warned at the recent annual meeting of Mulan in China's business circles, the future may enter an era of turbulent mergers and acquisitions, "but the failure rate of mergers and acquisitions is 80%", so we should be in awe.
The prologue has begun, but the journey is still long.