Temasek is nearing a deal to acquire a 10 per cent stake in the consumer products firm Haldiram Snacks Foods, valued at $10 billion, from the promoters.
Both the Agrawal family — the promoters of Haldiram Snacks Foods — and Temasek have signed a term sheet for the deal, Moneycontrol reported. Haldiram Snacks Foods is the combined fast-moving consumer goods (FMCG) business of the Delhi and Nagpur families of the snack major.
Temasek was one of several private equity (PE) firms, including Bain Capital and Blackstone, that had made offers to the Agrawal family to purchase a stake in the unlisted firm.
A term sheet is a preliminary agreement (usually non-binding) outlining the key terms and conditions of a potential deal. It marks the starting point for a more detailed, definitive agreement at a later stage.
“This is a pre-IPO deal and is expected to set a valuation benchmark. Temasek is looking to acquire a stake of less than 10 percent, with the entire firm valued at between $10 billion and $11 billion,” another source said.
The source mentioned that despite the slow pace of the deal, considerable progress had been made since late December. They stated that the Haldiram family members were aligned and that there was optimism about the deal being finalized. The source also noted that if the promoters deemed it appropriate, the possibility of selling an additional stake to other private equity firms remained open. However, it was still uncertain whether that option would be pursued.
Earlier reports suggested that Haldiram may be looking to sell up to 20 percent of its stake as part of efforts to unlock value in the company. Other private equity players in the final stage of the transaction include Blackstone and Alpha Wave Global.
Initial discussions with several bidders were focused on the sale of a majority or controlling stake in Haldiram Snacks. However, the focus later shifted to a partial stake sale.
The valuation of $10 billion to $11 billion for Haldiram Snacks equates to a range of Rs 85,700 crore to Rs 94,270 crore.
Earlier, a demerger of the FMCG businesses of Haldiram Snacks Private Ltd (Haldiram Delhi group) and Haldiram Foods International Pvt Ltd (Haldiram Nagpur group) led to the creation of a new entity, Haldiram Snacks Foods Private Ltd (HSFPL). Existing shareholders of HSPL and HFIPL now hold 56% and 44% stakes, respectively.
According to a February 16 report by Crisil Ratings, Haldiram’s product portfolio is diverse, including snacks, namkeen, sweets, ready-to-eat foods, frozen foods, biscuits, non-carbonated ready-to-drink beverages, pasta, and more. The group has a strong presence across India and exports to several international markets, including the USA and Europe.
