Actis exits Indian retailer Nilgiri's to Future Group

The value of the transaction was not officially disclosed but a number of reports put the deal at INR3 billion ($48.6 million). This means the GP - which acquired a 65% stake in 2006 for INR3 billion (then $66 million) - could be facing a loss.

According to a regulatory filing, FCEL - which already has KB’s Fairprice and Big Apple in its convenience store portfolio - will acquire a 97.97% stake in The Nilgiri Dairy Farm and its subsidiaries. The other shareholders in the busines were members of the founding Mudaliar family.

Actis was previously reported to be looking to exit the business in 2010 after a dispute with the founders. The PE firm was brought before the Chennai Company Law Board over a rights issue to fund expansion which was opposed by the family, among other things.

The dispute was eventually settled when Actis offered to alter its expansion plans for business and allow the family more participation in the business.

The Nilgiri's brand dates back to 1905 when it started out as a dairy farm enterprise. Since then, the company’s convenience store business has grown to some 1,405 outlets across four southern states: Kerala, Karnataka, Andhra Pradesh and Tamil Nadu.

The company operates it stores by licensing franchisee rights to third parties. It also produces its own line of private label items including food, groceries, confectionery and dairy, as well as conducting trade in general merchandise and imported products.

The deal is expected to strengthen FCEL’s presence in southern India, and there are plans for the company to expand its footprint in the region. The Nilgiri's production capabilities, supply chain and products could also be integrated with those of FCE’s other convenience chains.

"FCEL's acquisition of Nilgiris [...] is another step towards building a robust convenience stores through franchises in an asset light model as well as brings in new manufacturing capabilities and brands within the company,” said Biyani, CEO of Future Group, in a statement.

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• Topics
• South Asia
• Exits
• Consumer
• Buyouts
• India
• Exit
• Consumer
• Actis Capital
• Trade sale