NEW DELHI/MUMBAI: ChrysCapital is looking to create an investment platform as it closes in on at least two bakery-patisserie and dessert chains, Theobroma Foods and Belgian Waffle Co., at a combined valuation of around Rs 3,200-3,500 crore, said people aware of the development. It has a 60-day window to submit a binding offer for Theobroma and is aiming to finalise the terms of acquisition of Bloombay Enterprises, which owns and runs Belgian Waffle, for around Rs 1,000 crore in the next 30 days, said the people cited above. Bloombay is owned by husband-and-wife founders Shrey and Alisha Aggarwal and investor Marathon Edge Partners, which holds a 22% stake.
Final Rounds of Diligence
ChrysCapital, which is seeking to raise $2-2.2 billion for its tenth fund—its largest till date—is competing with EQT Partners for the Theobroma buyout and is in the final rounds of diligence. ChrysCapital returned over $7 billion from 80 exits and deployed $4.5 billion in over 100 investments.
Former Bain executive Nikhil Raghavan runs the technology and consumer focussed small and mid-market fund Marathon Edge Partners.
Theobroma's single largest shareholder, private equity fund ICICI Venture, had mandated Arpwood to find a buyer in January. It holds a 42% stake in the 20-year-old patisserie chain. A 51% bloc is with the founding Messman family, divided equally among four members. Employees and senior management hold the remaining 6-7%. All are expected to exit, depending on the final valuation.
Both chains started out in Mumbai but expanded across India after roping in financial investors. Begun in 2004 as a single-store bakehouse on south Mumbai’s Colaba Causeway by sisters Kainaz Messman Harchandrai and Tina Messman Wykes after borrowing Rs 1 crore from their father as seed capital, Theobroma ran as a family run enterprise till ICICI Venture made a $20 million commitment in 2017. In 2015, it brought in an external CEO, Cyrus Shroff, a former top executive at KKR & Co. It operates about 220 stores and delivery only outlets in 27 cities, including the top six metros. Its FY24 adjusted ebitda was Rs 60 crore on a Rs 380-400 crore topline and is aiming at Rs 80-85 crore ebitda in this financial year.
The Theobroma sale had also drawn interest from top-tier PE funds Bain Capital, Carlyle, Warburg Pincus, Advent, and Kedaara Partners as well as the Switz Group run by the Khorakiwala family, also known for their other businesses such as Wockhardt Pharma, Monginis and Akbarallys. ChrysCapital and EQT are the last two in fray. As of now, both funds are competing separately but have partnered on multiple transactions such as the acquisition of Credila from HDFC Bank and GeBBs. They could tie up again to co-create the planned platform, said people with knowledge of the matter.
Belgian Waffle has set up more than 560 smaller-format stores and kiosks in 190 Indian cities in nine years of operation. According to filings sourced from intelligence platform Tofler, it reported revenue of Rs 150 crore in FY23, up from Rs 46 crore the previous year. Its posted net profit of Rs 21.3 crore.
ChrysCapital and ICICI Venture declined to comment. Theobroma spokesperson and Belgian Waffle chief executive Ankit Patel didn’t respond to queries.
ICICI Venture’s plans to exit its seven-year-old investment in Theobroma comes at a time when global food, café and patisserie brands are entering India or expanding store count. These include Belgian bakery Le Pain Quotidien, French patisserie chain Ladurée, Reliance Brands-backed Armani/Caffè and Pret a Manger and Canada’s Tim Hortons.
A report by National Restaurant Association of India (NRAI) in July estimated the food services market at Rs 5.69 lakh crore in FY24, contributing 1.9% to India’s GDP. The report estimated this market will grow to Rs 7.76 lakh crore by FY28, fuelled by a rising middle class, the increasing propensity to dine out, aspirational demand from tier 2 and 3 locations, and food delivery platforms facilitating reach in newer markets. The NRAI report added that the food services sector would grow at an 8.1% compound annual growth rate between 2024 and 2028.
Final Rounds of Diligence
ChrysCapital, which is seeking to raise $2-2.2 billion for its tenth fund—its largest till date—is competing with EQT Partners for the Theobroma buyout and is in the final rounds of diligence. ChrysCapital returned over $7 billion from 80 exits and deployed $4.5 billion in over 100 investments.
Former Bain executive Nikhil Raghavan runs the technology and consumer focussed small and mid-market fund Marathon Edge Partners.
Theobroma's single largest shareholder, private equity fund ICICI Venture, had mandated Arpwood to find a buyer in January. It holds a 42% stake in the 20-year-old patisserie chain. A 51% bloc is with the founding Messman family, divided equally among four members. Employees and senior management hold the remaining 6-7%. All are expected to exit, depending on the final valuation.
Both chains started out in Mumbai but expanded across India after roping in financial investors. Begun in 2004 as a single-store bakehouse on south Mumbai’s Colaba Causeway by sisters Kainaz Messman Harchandrai and Tina Messman Wykes after borrowing Rs 1 crore from their father as seed capital, Theobroma ran as a family run enterprise till ICICI Venture made a $20 million commitment in 2017. In 2015, it brought in an external CEO, Cyrus Shroff, a former top executive at KKR & Co. It operates about 220 stores and delivery only outlets in 27 cities, including the top six metros. Its FY24 adjusted ebitda was Rs 60 crore on a Rs 380-400 crore topline and is aiming at Rs 80-85 crore ebitda in this financial year.
The Theobroma sale had also drawn interest from top-tier PE funds Bain Capital, Carlyle, Warburg Pincus, Advent, and Kedaara Partners as well as the Switz Group run by the Khorakiwala family, also known for their other businesses such as Wockhardt Pharma, Monginis and Akbarallys. ChrysCapital and EQT are the last two in fray. As of now, both funds are competing separately but have partnered on multiple transactions such as the acquisition of Credila from HDFC Bank and GeBBs. They could tie up again to co-create the planned platform, said people with knowledge of the matter.
Belgian Waffle has set up more than 560 smaller-format stores and kiosks in 190 Indian cities in nine years of operation. According to filings sourced from intelligence platform Tofler, it reported revenue of Rs 150 crore in FY23, up from Rs 46 crore the previous year. Its posted net profit of Rs 21.3 crore.
ChrysCapital and ICICI Venture declined to comment. Theobroma spokesperson and Belgian Waffle chief executive Ankit Patel didn’t respond to queries.
ICICI Venture’s plans to exit its seven-year-old investment in Theobroma comes at a time when global food, café and patisserie brands are entering India or expanding store count. These include Belgian bakery Le Pain Quotidien, French patisserie chain Ladurée, Reliance Brands-backed Armani/Caffè and Pret a Manger and Canada’s Tim Hortons.
A report by National Restaurant Association of India (NRAI) in July estimated the food services market at Rs 5.69 lakh crore in FY24, contributing 1.9% to India’s GDP. The report estimated this market will grow to Rs 7.76 lakh crore by FY28, fuelled by a rising middle class, the increasing propensity to dine out, aspirational demand from tier 2 and 3 locations, and food delivery platforms facilitating reach in newer markets. The NRAI report added that the food services sector would grow at an 8.1% compound annual growth rate between 2024 and 2028.
You may also like
UAE weather: Red alert issued for fog; poor visibility in some areas until 9am
Reasi terror attack: NIA searches underway in two districts of J-K
ECI team in Maharashtra to review poll preparedness
Setback for Xi Jinping's military ambitions as China's newest nuclear-powered submarine sinks at Wuhan port
