ICICI Venture acquires 10% in RJ Corp's Devyani International for Rs 250 crore

ICICI Venture has bought 10% stake in Ravi Jaipuria-promoted Devyani International Limited for around Rs.250 Cr. The deal values the company at Rs.2,500 Cr.

The funds raised by the company will be used for expansion of its foods business in India and in global markets.

TRANSACTION NOTE              
Devyani International runs restaurant chains of Yum-Restaurants-owned Pizza Hut and KFC and UK-based coffee chain Costa Coffee, in India.

It operates more than 200 food and beverage outlets across India and plans to open 150-160 outlets this year.

Company recently set up its own chain of South Indian restaurants, Vaango, where company will make an investment of Rs.100 cr over the next few years.

Ravi Jaipuria's group company, RJ Corp also holds a majority stake in a beer JV with Anheuser-Busch InBev, owns ice-creams brand Cream Bell, franchising rights for Walt Disney group company Disney Artist, and has interests in education, real estate and hotels.

In 2008, it consolidated all fod, retail and franchise operations under Devyani International. The beverages business is grouped under other subsidiary - Varun Beverages, which is RJ Corp's bottling company who handles the bottling for PEPSI.

In the fast foods space, last year, Coffee Day Holdings had raised $200 Mn from NSR, KKR and StanChart PE.

Source for above

ICICI Venture has bought a 10% stake in RJ Corp's Devyani International , which runs KFC, Pizza Hut and Costa Coffee chains in India, for about Rs 250 crore, two people familiar with the development said.

Ravi Jaipuria , founder of the Rs 3,000-crore RJ Corp, confirmed the investment deal, but declined to comment on its size.

"The deal was signed on Wednesday. It will support expansion of our foods business in India and in global markets," he told ET on Wednesday.

"Devyani also plans to go public before 2013," he added. Two officials close to the development said the private equity firm will pay Rs 225-250 crore for a 10% stake, valuing Devyani at $500 million.

ICICI Venture officials could not be reached for comment.

Analysts said it's a win-win deal because RJ Corp gets money to expand the business, while ICICI Venture gets a foothold in one of the fastest-growing businesses.

"It's a very good valuation," consulting firm Wazir Advisors founder and MD Harminder Sahni said. "It's the right time to invest because most restaurant chains like Domino's and Mainland China are doing well and the overall industry is growing rapidly," he said.

The restaurant business is booming in the country, thanks to rising incomes as well as changing lifestyles and food habits of the population, now dominated by the youth.

The food retailing and quick service restaurant industry sector is estimated at about Rs 5,000 crore and is growing at an annual rate of 40%.

Devyani International, which operates more than 200 food and beverage outlets across the country including Yum Restaurants-owned Pizza Hut and KFC as well as UK coffee chain Costa Coffee, has big expansion plans.

It will open 150-160 restaurants this year alone across its international brands.

The chain recently set up its own chain of South Indian restaurants, Vaango, where it has announced 100-crore investment over the next few years.

The funds will also support expansion of RJ Corp-run KFC stores in Africa.

The deal with ICICI Ventures is the first private equity investment in a company owned by RJ Corp, which is international beverage maker PepsiCo's biggest bottler in South Asia.

RJ Corp also holds a majority stake in a beer joint venture with Anheuser-Busch InBev, owns ice-creams brand Cream Bell, franchising rights for Walt Disney group company Disney Artist, and has interests in education, real estate and hotels.

In 2008, it consolidated all food, retail and franchise operations under Devyani International. The beverages business is grouped under another subsidiary, Varun Beverages.

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Not listed, hence I posted here. If admins feel it can be moved to another best thread, please do.

Edited by rdyn - 04/Oct/2011 at 9:56am

This forum is for discussion, not necessarily only when IPO's come.

No, their IPO is not coming anytime soon.