November 22, 2012
Danone and Fonterra may attempt to buy over a controlling stake in Hyderabad-based Tirumala Milk Products after promoters and private equity investor, Carlyle Group, commenced work on a share sale plan.
The 15-year-old Tirumala , the second largest private supplier of liquid milk in the southern states, will ask around US$450 million, in enterprise valuation, said sources directly familiar with the process.
Carlyle, which invested less than three years ago, holds 20% stake. A group of five first-generation rural entrepreneurs jointly own the remaining majority shares. The PE investor and the promoters have short-listed three global investment banks as they get ready to launch a sale. "Investment banker/s will be mandated shortly after a few global buyers show interest. The sale will be open only to foreign strategic acquirers and the original founders plan to retain a part of their stake," said a source mentioned earlier.
French foods behemoth, Danone, is among the interested suitors who have approached the company, expressing serious intent to buy a large stake. Fonterra of New Zealand is another foreign player, but talks with the latter is in preliminary stages. Investment bankers have pitched names of other global acquirers but clarity would emerge only after a formal process begins.
