Carlyle, Orkla Foods, TA Associates in race to buy Sunrise Foods

Industry: ,    January, 2020

Kolkata-based Sunrise Foods Pvt. Ltd, which sells Indian spices, has received interest from global private equity firms, including Carlyle Group and TA Associates, as well as Norwegian supplier of branded consumer goods Orkla Foods to purchase a stake in the company, three people aware of the development said, requesting anonymity.

“The promoters are looking to sell a controlling stake in the company at a valuation of over 2,500 crore,” said the first person cited above.

“The company has appointed JM Financial as an adviser to the transaction.”

Incorporated in 1975, the spice brand started as a partnership firm, called Sharma Brothers, and was later reconstituted as a limited company, Sunrise Spices Ltd, in 1996. Its name was changed to Sunrise Foods in 2010.

The firm is run by the Kolkata-based Sharma family, which has been in the spice business for more than 100 years. Its promoter group includes Arvind Prakash Sharma, Satya Prakash Sharma, Anand Prakash Sharma, Gaurav Sharma and Shailendra Prakash Sharma.

Under the ‘Sunrise’ brand, which was registered in 1953, the company manufactures spices, blended spices, papad, mustard oil, and related products at facilities in Kolkata, Agra, Jaipur and Bikaner. With a stronghold in east India, the company competes with other spice brands such as Everest and MDH. It also operates two other brands called Jumbo and Mewaram.

Sunrise Foods recorded a net profit of 41 crore on a total revenue of 400 crore in the financial year ended 31 March 2018, according to a 29 May 2019 note by rating agency Crisil.

“The company is engaging in talks to explore a strategic partnership or equity fundraise from financial sponsors. The bidding process for the transaction is due in another two weeks,” said the second person.

A Sunrise Foods spokesperson declined to comment on queries from Mint. JM Financial, Carlyle, Orkla Foods and TA Associates did not respond to emailed queries.

India’s spice industry has, in the past, evinced interest from global private equity firms and international brands.

In 2017, US-based food firm McCormick and Co. had bought Kohinoor Speciality Foods India Pvt. Ltd and started commercial production of Indian spices, ready-to-cook recipe mixes and ready-to-eat products.

In 2010, McCormick took a 26% stake in Kerala-based Eastern Condiments Pvt. Ltd for an estimated $35 million.