Future Consumer Enterprise (FCEL), the food and fast moving consumer goods arm of Kishore Biyani’s Future Group has acquired Bangalore-based convenience store chain Nilgiris from private equity firm Actis.
The deal will help it increase scale in southern India and also expand its foods portfolio.
FCEL, which has picked up 97.97% stake in The Nilgiri Dairy Farm, didn’t officially disclose the deal size. But it is estimated to be in the range of Rs 250-300 crore.
“FCEL’s acquisition of Nilgiris is another step towards building a robust convenience store network in India,” said Kishore Biyani, CEO, Future Group. Further, FCEL will also look to ride on Nilgiris’ expertise to expand convenience store network via a franchisee model.
“This acquisition is synergistic as it enables strengthening and expanding convenience stores through franchises in an asset light model as well as brings in new manufacturing capabilities and brands within the company,” Biyani added
Nilgiris was promoted by the Mudaliar Family since 1905 till PE firm Actis acquired a majority stake in 2006. It is a leading food and grocery retail chain in south India and currently operates 140 franchise stores. That apart, Nilgiris also has a portfolio of food brands, including manufacturing facilities for dairy and bakery products.
FCEL is primarily concentrated in west and north India, where it operates convenience stores under the KB’s Fair Price and the Big Apple brand. It had acquired Big Apple, which has stores in the National Capital Region in September 2012. It also owns the rural distribution and wholesale chain Aadhaar in Gujarat and Punjab.
Supermarket giant Future Group wants to become a FMCG major given that margins in foods business are much higher than those in retail. In September, the company opened its first food park, which will house over 50 food processing units spread over 110-acres, on the outskirts of Bangalore. Two more food parks are also planned.